Macau’s gaming landscape is showing signs of stability with a consistent gross gaming revenue (GGR) as the city adapts to new economic conditions and shifting strategies among major casino operators. According to JP Morgan analysts, the daily GGR for the past week has maintained a level close to the average for the earlier part of March, pointing to a resilient sector amid various challenges.

Revenue trends and forecasts:

The daily GGR from March 1st to 16th averaged around MOP$631 million (US$78.8 million), with the total reaching MOP$10.1 billion (US$1.26 billion). This performance is predominantly driven by mass-market gaming, which is operating at approximately 110% of its pre-COVID levels, while VIP segments linger in the low 20% range. According to Inside Asian Gaming, JP Morgan’s DS Kim, Selina Li, and Mufan Shi project that March’s total GGR will mirror last year’s figures at about MOP$19 billion (US$2.37 billion), positioning the first quarter of 2025 to mirror these figures despite challenging comparisons from previous years.

Despite the stable revenue figures, investor enthusiasm towards Macau gaming stocks remains tepid. However, the analysts suggest that the sector’s current valuations could present attractive opportunities for long-term investors. They anticipate a modest growth of 3% for the full year of 2025, expecting acceleration in the latter half due to favorable comparisons and potentially easier regulatory conditions.

Casinos in Macau are increasingly pivoting towards the premium-mass sector, moving away from the traditional focus on the base mass and VIP markets. Jefferies Equity Research analysts, led by David Katz following a recent visit to China, observed a strategic realignment across major operators. They noted enhancements like SJM Holdings’s Grand Lisboa and new capacities from Sands and Galaxy Entertainment aimed at attracting high-end players. This shift raises questions about the future of downtown casinos, which have traditionally catered to a now-diminishing VIP clientele.

Operational highlights and developments:

Katz highlighted significant developments such as Galaxy’s expansion with its new Andaz megaresort, which includes extensive facilities poised to boost event-driven traffic. Meanwhile, Sands is transforming 4,000 rooms at The Londoner into 2,400 luxury suites, expected to complete by late May, which should enhance revenue despite reducing the number of available rooms.

Amid these operational shifts, Macau’s Chief Executive Sam Hou Fai recently reiterated the government’s cautious fiscal outlook, reflecting ongoing adjustments in the gaming sector, which significantly contributes to the city’s finances through a 40% tax on GGR.

The gaming industry in Macau is at a pivotal juncture, balancing between legacy practices and new market realities. With the mass GGR showing robust performance and strategic shifts potentially setting the stage for future growth, the sector remains a critical component of Macau’s economic landscape.