In a recent update, Citigroup has raised its fourth-quarter gross gaming revenue (GGR) forecast for Macau casinos, showcasing a positive outlook despite prevailing worries about the Chinese economic landscape. The revised estimate now stands at MOP52.5 billion (US$6.52 billion), up from the previous MOP51.0 billion forecast, indicating an approximate 7.4% quarter-on-quarter growth.
1. Unprecedented Event Calendar Boosts Prospects
Citigroup’s optimistic stance is primarily fueled by Macau’s exceptional event calendar for the fourth quarter of 2023. Analysts George Choi and Ryan Cheung emphasize that this lineup, not limited to the National Day Golden Week, could provide a substantial boost to both gaming and non-gaming revenues.
2. Strong Spending Despite Economic Weakness
Contrary to concerns regarding the Chinese economic slowdown, Citigroup pointed out that players continue to spend significantly in Macau. This resilience is seen as a positive indicator for the region’s casino industry.
3. Anticipated GGR Surge during Golden Week
With the upcoming October Golden Week, encompassing the lunar-calendar based Mid-Autumn Festival and China’s National Day, Citigroup anticipates a surge in Gross Gaming Revenue (GGR), potentially hitting as high as MOP19.0 billion in October. The firm expects Macau GGR to average approximately MOP765 million a day during October 1 to 6, and MOP575 million for the remainder of the month.
4. Concerts and Events Enhance Post Golden Week Prospects
Citigroup foresees a less severe ‘post Golden Week hangover’ due to scheduled concerts and shows, such as those featuring renowned artists like Eason Chan. These performances are expected to sustain the gaming revenue momentum even after the Golden Week.
5. Projections for the Rest of 2023 and Beyond
Citigroup has also raised its GGR forecasts for November and December, projecting MOP16.0 billion and MOP17.5 billion, respectively. Moreover, the institution has adjusted its estimates for 2024 and 2025, reflecting continued growth in Macau’s gaming sector.