Macau casinos earn similar revenue with far lower junket costs: Study | AGB
Summary
A peer-reviewed study from the Centre for Gaming and Tourism Studies at Macao Polytechnic University finds Macau’s gaming industry has materially changed under the new concession framework. Between 2019 and 2023–24, commissions, incentives, discounts and rebates paid by concessionaires fell far more sharply than gross gaming revenue (GGR), meaning operators are now generating similar gaming receipts with much lower intermediary costs.
The paper highlights: total commission-related spending was MOP39.507 billion in 2024 and MOP31.762 billion in 2023 (down 37–49% versus MOP62.608 billion in 2019), while GGR fell by a smaller 22–37% range. The authors link the shift to regulatory reform (junket profit-sharing banned; commission caps introduced) and a structural move away from junket-driven VIP business. They also examine the accounting treatment of MOP108.8 billion in non-gaming investment pledges and warn against premature capitalisation, urging disclosure as contingent liabilities until project details and asset ownership are finalised.
The study breaks out operator-level impacts: SJM and Melco show the largest falls in commission ratios, Sands China is an exception with a slight rise, and MGM China posts improved net margins driven by lower depreciation and amortisation.
Key Points
- Total industry spending on commissions, incentives and rebates: MOP39.507bn in 2024 and MOP31.762bn in 2023, versus MOP62.608bn in 2019 (a 37–49% decline).
- GGR fell by a smaller margin (22–37%), implying operators retain similar revenue with far lower intermediary costs.
- Regulatory change (new concession regime and junket law) removed profit-sharing and introduced commission caps, weakening junkets’ role.
- Operator differences: SJM’s commission share fell from ~20% (2019) to ~5–7% (2023–24); Melco from ~22% to ~11–13%; Sands China saw a slight increase to ~20–21%.
- Aggregate net profit for six concessionaires: MOP29.447bn in 2024 and MOP18.512bn in 2023 — down 38% and 61% from 2019 respectively; MGM China is the notable margin improver.
- Non-gaming pledges total MOP108.8bn over the 10-year concession; the study recommends treating these as contingent liabilities until government approvals and ownership arrangements are settled.
Why should I read this?
Quick take: if you follow Macau gaming or work in casino finance, this is gold. The study shows the VIP/junket model is shrinking — and operators are still pulling in comparable revenue with much lower commission bills. That changes how you think about profitability, risk and the true value of non-gaming pledges. Skim it and you’ll save yourself hours of digging through filings.