Macau casino operator Sands China Ltd says revenues from the premium-mass segment have already reached half pre-COVID-19 levels. Grant Chum Kwan Lock, Sands chief operating officer, recently stated, “Premium mass has made a very significant recovery and already approached around 50% of pre-pandemic levels.”
GGRAsia has said that he made this statement during a conference call with investors to discuss its first-quarter financial results. This source detailed that the company recorded $336 million in premium-mass gross gaming revenues for the three months to the end of March. Reports are that these figures represent a rise of 12% quarter-on-quarter but a year-on-year decline of around 57%.
Grant Chum has also let it be known that gross gaming revenues from the company’s VIP operations have been struggling lately, currently sitting are around 20% of pre-pandemic levels.
He then disclosed that the two high-value segments have recently diverged to follow very different trajectories. It was said that this is due, in part, to changes to the structure of the Macau market.
One of these changes is that more and more customers are now choosing to deal directly with casino operators rather than through junkets.
In gambling terms, a junket is an arrangement whereby a person or a group of persons is introduced to a casino operator by a junket promotor. The junket promotor receives a commission or other payment from the casino operator.
Casino junket operators have traditionally played a critical role in the gambling industry in Macau. Still, coronavirus-related travel restrictions have had an enormous impact, causing visitation levels from neighboring Hong Kong and mainland China to plummet to near-record levels.
While visitor figures are now increasing once more, it’s not making much of an impact on the few junket operators that are left.
The Sands China Ltd Empire
Sands China Limited is a subordinate of American casino giant Las Vegas Sands Corporation. It is responsible for several popular properties in Macau. They include:
- Sands Macau
- The Venetian Macau
- The Plaza Macau
- The Parisian Macau
- The Londoner Macau
This operator is one of many that has been hit hard by the pandemic. For example, it says its net aggregated revenues for the first quarter of 2020 fell dramatically by 65.1% year-on-year to just $814 million.
However, Chum remained optimistic about a recovery and had this to say to investors.
“All of the operators have attracted more consumers to their premium-mass programs, and we expect this to continue over time. In March, we started to experience a pretty meaningful rebound in visitation that has continued in April. This acceleration is being seen across the different segments, and the encouraging thing is that since March, we’ve seen an acceleration in base mass.”
Sands China’s Future
The expectations are that the Macau casino market will recover across the board and that the encouraging trends currently being experienced will continue to accelerate. Grant also proclaimed that the company would be making preparations to invest in non-gaming facilities in the region. This will help ensure the extension of its local casino license. The license is due to expire in June 2022.
He also reported that the Las Vegas Sands Corporation could join an initiative from the Chinese government. The initiative is to invest in non-gaming attractions in the areas around Macau, Hong Kong, and Guangdong Province. The company plans to fund the developments out of the $6.25 billion it earned from the agreed sale in Nevada of its The Venetian Resort Hotel Casino and nearby Sands Expo and Convention Center properties.