Macau Gaming Giants, MGM China and Melco, Regaining Strength in Casino Industry
No doubt about it, Macau took a massive hit from the 2020 pandemic's wrath. In the past couple of years, this gambling mecca struggled financially and lost plenty of investors. Some even thought it was the end of the line for the world's largest gambling destination. But fear not, it appears that MGM China has stepped up to save the day.
MGM China and Melco's Stellar Comeback
Just a few years back, Macau was the undisputed champion of international gambling, raking in six times the gambling revenue of Las Vegas. However, the COVID-19 lockdown knocked the city for a loop. Casinos were losing revenue, and Las Vegas, of all places, overtook Macau as the big kahuna of gambling hubs. But fear not, Macau's recently loosened its COVID restrictions, and the city is seeing a major revival, largely thanks to two gambling heavyweights.
MGM China managed to survive the COVID era, coming out stronger on the other side, and they're not the only ones. Melco Resorts, owned by Chinese entrepreneur and casino tycoon Lawrence Ho, also had a bang-up comeback this year. Both companies reported fantastic recoveries, with MGM China's shares skyrocketing by 114%, and Melco Resorts' shares jumping by an even more impressive 144%. Melco International, their parent company, saw a share boost of 81%.
Macau's revitalization didn't come as a shock to many. Analyst DS Kim from JPMorgan predicted an overall gross gaming revenue increase by the end of the year. According to Kim, MGM China's 16% gross revenue in January was "significantly ahead of the 9% to 10% levels back in 2019." Kim then went on to say that the demand for the market was significantly under-appreciated.
But the pandemic left its mark. Recently, Lawrence Ho, owner of Melco Resorts, admitted that the company's number one objective for the next few years is to pay off their massive debt. Melco Resorts racked up a debt exceeding $8 billion by the end of 2022, almost double their 2019 debt of $4.4 billion.
Wrap-up
It seems China's gambling hub is finally pulling through from the 2020 pandemic. MGM China and Melco Resorts are the main drivers behind Macau's revival. Granted, it's not ideal, but it appears that the city is doing a great job of recapturing its former glory.
Casino-games in Macau, once a thriving gambling mecca, saw a significant decline due to the 2020 pandemic, with MGM China and Melco Resorts struggling financially. However, these casino-and-gambling giants have managed to make a comeback, with MGM China's shares skyrocketing by 114% and Melco Resorts' shares jumping by 144%, indicating a promising revival for both companies and the casino-games industry in Macau.
