Macau’s Mass Gaming Market Likely to Improve Steadily – Deutsche Bank

MACAU, SAR (October 6, 2023) — Macau’s mass-market gross gaming revenue (GGR) has now recovered to a level slightly below that of 2019, while VIP segment GGR has surged to 35 per cent of pre-pandemic levels, Macau News Agency report brokerage Deutsche Bank said.

In a recent report, analysts Carlo Santarelli, Steven Pizzella, and Alfonso Straffon noted that the trajectory of visitation in Macau had shown consistent improvement with package tour volumes also on the rise.

As a result, the mass gaming market has appeared to be steady, and further sequential improvement is expected to be seen in the upcoming months.

The analysts said that concerns surrounding the recovery trajectory in Macau may have been misguided, and they caution against attaching too much significance to short-term and relatively “insignificant data-points”.

Commenting on Las Vegas Sands(LVS), Deutsche Bank expects that the recovery in Macau and its growth prospects to serve as a differentiating and attractive factor for dedicated US consumer investors.

Given competitor supply additions on Cotai and the gradual increase in visitation, the report suggested that recapturing its pre-pandemic mass gaming market share in the near to medium term could pose a challenge for LVS.

“Over the next several years, with recent tower openings at Galaxy and Studio City, and potentially more capacity coming at Galaxy, we estimate LVS hotel room footprint will represent ~40% of the Cotai market,” the analysts said.

Deutsche Bank’s updated model projects that the group’s Macau property EBITDA will reach 2019 levels by 2025, with Macau margins exceeding 2019 levels in 2024.

SOURCE: Macau News Agency.