Macau’s gross gaming revenue (GGR) is anticipated to reach MOP$17 billion (US$2.11 billion) in December, positioning it as one of the strongest months of the year. Despite a slow start attributed to a low VIP hold, analysts from JP Morgan project a robust recovery, with expectations of improved demand leading up to Christmas and the year-end holidays. The following analysis provides insights into the factors influencing Macau’s gaming industry in December.
GGR Performance in Early December:
GGR for the initial 10 days of December is estimated at MOP$5.2 billion (US$646 million).
The daily run-rate during this period is MOP$520 million (US$64.6 million), slightly weaker than November’s MOP$535 million (US$66.5 million) per day.
The slow start is attributed to a low VIP hold, approximately 2% compared to the standard 3%-plus, impacting VIP GGR, which stands at around 15% of pre-COVID levels.
Mass GGR and Recovery Trends:
Mass GGR for 1 to 10 December is estimated between 95% and 100% of pre-COVID levels, marginally down from recent months.
Analysts anticipate a ramp-up in demand in the coming weeks, leading to a recovery in mass GGR alongside normalizing luck factors.
Full-month GGR is expected to hit MOP$17 billion, with a ~MOP$550 million (US$68.4 million) per day run-rate and a 100%+ mass recovery.
Quarterly Improvement and EBITDA Growth:
A projected result of MOP$17 billion in December implies an 8% quarter-on-quarter improvement in GGR for Q4.
This improvement is expected to drive EBITDA growth of 8% to 10%, surpassing historical Q4 EBITDA growth of around 5%.
Historical Monthly Performances:
October remains the strongest month of the year with GGR reaching MOP$19.5 billion (US$2.42 billion).
August is the only other month surpassing MOP$17 billion, recording GGR of MOP$17.2 billion (US$2.14 billion).
Despite a slow start in December, Macau’s gaming industry is poised for a robust recovery, with expectations of increased demand and normalized luck factors. The projected GGR of MOP$17 billion reflects an optimistic outlook, indicating an 8% quarter-on-quarter improvement and potential EBITDA growth. Analysts anticipate a strong finish to the year, positioning Macau’s gaming sector for continued recovery and resilience.