Macau Gaming Revenue Skyrockets, Outpacing Analyst Predictions


After a stellar performance in May, where the combined gross gaming revenue (GGR) of Macau concessionaires hit an unprecedented pre-pandemic high, several analysts suggest that the revenue forecasts for operators in the region might have underestimated the market’s potential.

In May, six Macau concessionaires raked in a collective GGR of $2.5 billion, marking a 9% successive gain and a 30% leap compared to the previous year. That record was just 22% shy of the May 2019 figure. While the industry expected a 24% decline for May 2024 compared to the same month five years prior, Macquarie analyst Chad Beynon expressed in a recent report to clients that the strong May records might genuinely indicate some overly cautious predictions.

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Linda Huang, Macquarie’s Head of Asia Consumer Research, shared a plausible explanation for the sequential decline of May’s figures compared to 2019. She emphasized that the slowdown was likely due to a more balanced promotional environment in the current quarter with an emphasis on referral player segments. This change could potentially benefit entities like Galaxy and Sands China. She added, “Bottom line, we believe the upward trajectory for Macau GGR growth remains intact post-May’s result.”

Between 2010 and 2019, annual visitations to the Asian casino hub increased consistently, reaching 39.40 million in 2019. In comparison, the number was 28.21 million in 2023, suggesting there’s still plenty of room for recovery towards pre-pandemic levels. Should the region achieve this target, Macau’s gaming equities stand to gain significantly.

Beynon predicts that Macau concessionaires will collectively generate $2.3 billion in GGR this month, consequently leading to a second-quarter GGR of $7.2 billion. If this projection is accurate, it would signify a 22% decrease from the same period two years ago.

Operators that are shifting their focus towards mass-market clients and nongaming amenities are expected to benefit, such as Wynn Macau, a subsidiary of Wynn Resorts, which has been gradually mitigating its reliance on VIPs. Beynon observes that consensus remains reserved, especially for Wynn, which has been predicted to gain a share.

Encouragingly, beyon is also optimistic about Las Vegas Sands and MGM Resorts International, the other two US-based Macau operators, along with Wynn. All three stocks are deemed “outperform” with an average upside of 32.3%.

This is particularly prominent for Sands investors, as unlike its rivals MGM and Wynn, the company does not have any interest in Las Vegas. Beynon concludes, “After factoring in minority ownership, casino revenue is categorized as follows: WYNN — 39% Macau, 44% Vegas, 17% Regionals; LVS — 57% Macau, 43% Singapore; and MGM — 11% Macau, 62% Vegas, 27% Regionals.”