CLSA, a leading brokerage firm, has updated its forecasts for Macau’s gross gaming revenue (GGR) for 2024, now projecting a 1.6 percent increase. The revised estimate suggests that GGR will reach MOP$239.9 billion ($29.8 billion) this year, fueled by heightened visitation and optimistic assumptions regarding GGR per visitor.
Drivers of growth:
This upward adjustment extends to the 2025 forecast, with a 3.2 percent increase anticipated. This growth is attributed to larger gambling budgets and an uptick in visitation, driven by the recent expansion of eligible cities under the Individual Visitation Scheme (IVS).
Analysts at CLSA underscore significant year-on-year growth expected for Macau’s GGR. They anticipate a robust 31.1 percent increase to MOP$239.9 billion ($29.8 billion) in 2024, followed by a solid 6.4 percent rise to MOP$255.2 billion ($31.7 billion) in 2025.
In addition to revising GGR forecasts, CLSA also raises its outlook for the gaming sector’s EBITDA. They expect EBITDA to reach $9.7 billion in 2025, marking a promising 2 percent increase from 2019 levels.
CLSA highlights sustained gaming demand and supportive policies as key drivers behind the projected increase in visitation. Despite remaining 22 percent below May 2019 levels, Macau’s GGR in May reached a new post-COVID high, signaling a promising trajectory for the industry.
Continued preference for premium segment:
The allure of Macau for premium players remains strong, as outlined in CLSA’s investment memo. Analysts Jeffrey Kiang and Leo Pan anticipate continued growth, particularly in the grind and base mass segments, driven by an expected aggregate population increase of 45 million, representing a substantial 14 percent rise from 2019 visitation levels.
While the overall outlook is positive, CLSA cautions about intense competition among concessionaires, as Asia Gaming Brief reports. Analysis reveals a notable 10 percent quarter-on-quarter increase in aggregate rebates and reinvestment in players in 1Q24, outpacing corresponding GGR growth, underscoring the importance of such investments in driving business.
In its assessment of Macau gaming concessionaires, CLSA predicts that Galaxy will gain market share, expanding from 17.4 percent in 1Q24 to 18.9 percent in 4Q26. Conversely, MGM China is expected to experience a decline, with its market share dropping from 17.2 percent in 1Q24 to 15.1 percent in 4Q24, before stabilizing thereafter.
Considering these forecasts and market dynamics, investors in the gaming sector should closely monitor the evolving landscape in Macau. Opportunities for strategic investments and partnerships may arise as the market continues to grow and adapt to changing consumer preferences and regulatory environments.
CLSA’s revised forecasts for Macau’s gaming revenue paint a promising picture of growth, driven by increased visitation and gambling budgets. The firm’s analysis also sheds light on the competitive landscape and the evolving dynamics of market share among concessionaires, providing valuable insights for stakeholders in the industry.
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