Macau’s gaming industry is expected to continue its recovery in 2025, with analysts forecasting steady growth, though at a more moderate pace compared to the previous year. According to a recent report by CreditSights, a division of Fitch Group, Macau’s gross gaming revenue (GGR) is predicted to increase by 8% in 2025, reaching approximately MOP$245 billion (US$30.5 billion). This growth, while slightly more restrained than the 2024 surge, still surpasses the government’s earlier projection of MOP$240 billion (US$29.9 billion).

Catalysts for growth in 2025:

The outlook for 2025 follows a solid recovery trajectory for the Macau gaming sector in 2024, with the region’s GGR reaching MOP$227 billion (US$28.3 billion), or about 78% of the levels seen in 2019. This rebound was in line with earlier expectations, and CreditSights’ forecast for 2025 indicates GGR returning to 84% of pre-COVID levels.

Several factors are expected to drive this growth in 2025. According to Inside Asia Gaming, one of the key contributors is the easing of travel restrictions and a gradual return to pre-pandemic mobility. In particular, more Chinese cities were added to Macau’s Individual Visit Scheme in 2024, allowing greater access to the region. Additionally, multi-entry visas for residents from neighboring cities are likely to boost the number of visitors.

Alongside this, ongoing renovations and room conversions at major casinos, along with the expansion of entertainment offerings, are set to enhance Macau’s appeal to tourists. Key operators such as MGM Macau/Cotai, Wynn Macau, Sands China, and Melco Resorts are all involved in significant upgrades. For example, MGM is converting rooms, while Wynn is opening a new destination food hall, and Melco is set to relaunch the iconic House of Dancing Water.

Consumer sentiment is also expected to improve due to macroeconomic support from Chinese authorities, which could provide a boost to spending and overall visitation. CreditSights predicts that Macau’s visitation levels will reach approximately 94% of the levels seen in 2019, with GGR per visitor increasing by 2% year-on-year, reaching MOP$6,606 (US$824). This indicates a positive trend in both the volume of visitors and their spending habits.

Seaport’s outlook: long-term growth with key market shifts:

Seaport Research Partners also shares an optimistic view for Macau’s gaming market in 2025, predicting a 7% growth in GGR. While slightly more conservative than CreditSights’ forecast, Seaport’s projections take into account the possibility of a stronger-than-expected recovery, particularly if the Chinese economy shows signs of improvement and consumer sentiment strengthens.

Seaport’s analysts also foresee a potential upside in EBITDA, with an expected increase of around 9% across the industry. This would represent a positive trajectory for the region’s operators, as GGR growth is accompanied by a proportional rise in earnings. The longer-term forecast, spanning 2025 to 2027, suggests continued growth at similar rates, with large operators like Sands China and Galaxy Entertainment Group (GEG) poised to capture a larger share of the market.

As the market continues to evolve, Seaport also highlights the potential for market share shifts, with larger players expected to benefit most. Sands China and GEG are seen as likely gaining ground, while smaller operators may face challenges, particularly if the recovery in Macau’s mass market is stronger than anticipated. This trend could further exacerbate competitive pressures, making it more difficult for smaller operators to maintain their market position.

While the overall outlook for the gaming sector is positive, challenges persist, especially for smaller operators and those with weaker market positions. SJM Holdings, for example, faces significant headwinds. Analysts at Seaport Research Partners have given SJM a “Sell” rating, citing its poor positioning in the increasingly competitive market. They point to factors such as the company’s over-reliance on the Peninsula, its relatively weak location on Cotai, and its struggles to ramp up operations at the Grand Lisboa Palace (GLP).

Furthermore, SJM’s high debt levels are a major concern, particularly as the recovery of GLP has been slower than expected. According to Asia Gaming Brief, Seaport’s Vitaly Umansky notes that SJM is unlikely to regain market share in 2025 and beyond, largely due to these structural issues. Moreover, the company’s inability to restart its dividend in the near future adds to its challenges. He said: “We expect SJM to show quarter-over-quarter share loss in Q4 (estimated at -80bps). We expect SJM to struggle to gain share in 2025 and beyond, likely losing share due to an inferior product offering, poor location on Cotai, and potential loss of satellite casinos”.

Looking to the broader industry, Seaport forecasts that Macau’s casino EBITDA will rise to approximately US$8.4 billion in 2025, an increase of about 9% from 2024. The projected rise in EBITDA is indicative of a steady recovery in the region, although analysts note that EBITDA margins have been compressed compared to pre-pandemic levels due to higher operating costs and increased player reinvestment. Seaport expects margins to improve slightly in 2025 as revenue growth outpaces cost increases.

The firm also notes that the shift towards a more profitable mass market and non-gaming segments could benefit operators with a strong presence in these areas, while those relying more on lower-margin VIP play might see less favorable results.