Macau’s gaming industry has experienced a robust start to the year, with gross gaming revenues (GGR) for the first 21 days of January estimated to have reached MOP$13 billion (US$1.61 billion). This figure translates to a daily run-rate of MOP$619 million (US$76.8 million) per day, surpassing December’s daily average of MOP$599 million (US$74.4 million). Analysts from JP Morgan have noted a continued acceleration, contrary to expectations of a slowdown ahead of the Chinese New Year holiday.
GGR Performance:
The past seven days have seen an even higher estimated daily run-rate of MOP$628 million (US$78.0 million), showcasing a surprising resilience in the market. Mass gaming GGR is reported to be running at close to 110% of pre-COVID levels, while VIP gaming is still lingering around 20%. This suggests a remarkable recovery in the mass market segment compared to the VIP sector.
Projections and Analysis:
Despite the strong performance, analysts anticipate a potential slowdown next week due to seasonality factors. However, JP Morgan maintains its January GGR forecast, ranging between MOP$17.5 billion and MOP$18 billion (US$2.17 billion and US$2.23 billion). This projection reflects the analysts’ confidence in the overall health of Macau’s gaming industry, even in the face of potential short-term fluctuations.
Comparison with Previous Months:
In December 2023, Macau reported GGR of MOP$18.57 billion (US$2.30 billion), marking the second-highest monthly revenue tally of the year. The current January figures indicate a continuation of the positive trend, emphasizing the resilience and adaptability of the gaming sector in Macau.
Industry-wide EBITDA Growth:
JP Morgan analysts project a quarter-on-quarter growth in industry-wide earnings before interest, taxes, depreciation, and amortization (EBITDA) by 8% to 9%. This growth is expected to bring EBITDA to approximately 85% of pre-COVID levels. Such a positive trajectory is a testament to the sector’s recovery, with Sands China parent company, Las Vegas Sands, set to kick off the earnings season, providing further insights into the overall financial health of Macau’s gaming industry.
Macau’s gaming industry has defied expectations in the initial days of January, displaying a remarkable surge in gross gaming revenues. The strong performance in both mass and VIP segments, along with the projected EBITDA growth, paints a positive picture for the sector’s recovery. While short-term fluctuations may occur, the overall outlook remains optimistic, reinforcing Macau’s status as a key player in the global gaming landscape. As the earnings season unfolds, stakeholders will closely monitor the financial reports for a comprehensive understanding of the industry’s trajectory in the post-COVID era.