Macau's gaming industry experienced a strong rebound in June, with gross gaming revenue (GGR) increasing by 19% year-over-year to 21.06 billion Macau patacas (approximately 2.61 billion US dollars), far exceeding market expectations. However, US investment firm CBRE Capital Advisors threw cold water on this, pointing out that Macau's current prosperity may only be superficial, with its growth core still heavily dependent on the "blood transfusion" from Mainland China's economy.
CBRE analysts John DeCree and Max Marsh noted in a report released on July 2 that despite the impressive GGR performance in June, the driving force behind it was not local factors in Macau, but rather economic stimulus policies and restored consumer confidence from Mainland China. They explicitly stated: "The sustainability of Macau's gaming revenue is entirely dependent on the performance of the Chinese economy."
The report analyzed that the unexpected rise in gaming data in June was partly due to large concerts held in Macau by stars like Jacky Cheung and G-Dragon, which boosted short-term human traffic. However, CBRE believes that while such events can drive customer flow, they are insufficient to support long-term growth. "The real driver behind the GGR resurgence is China's loose monetary policy and domestic demand stimulation measures."
CBRE pointed out that since May, the People's Bank of China has continuously released liquidity, including lowering the deposit reserve ratio by 50 basis points and reducing the three major benchmark interest rates to their lowest levels since 2019. Following this in June, 19 supportive policies were introduced, focusing on activating the consumer market and restoring public confidence. This series of measures brought a short-term "economic tailwind" to Macau's gaming industry.
More crucially, in the context of ongoing tensions in China-US relations, the Chinese government may continue to strengthen domestic demand stimulation to offset export uncertainties. CBRE believes that it is this policy orientation that has provided key support for Macau's recent gaming rebound.
Although several brokerages predict that July GGR is still likely to maintain growth momentum, CBRE advises investors to remain calm: "If gaming revenue cannot continue to grow in sync with China's GDP performance, Macau's recovery prospects still have hidden concerns."
Despite multiple major concerts scheduled for July, which seem to indicate strong short-term tourist volumes, CBRE's stance is clear: the fate of Macau's gaming industry does not depend on the stage lights of stars, but on whether the Chinese economy can sustain this "gamble" in the long term. Behind the facade of recovery, the real determinants of future direction are still the macroeconomic fundamentals.
