Investment bank CLSA forecasts more moderate growth in Macau’s gaming revenue in 2025, with a potential improvement in the growth rate expected in 2026, once Chinese property prices stabilize and consumer confidence picks up in the second half of 2025.
This projection comes amid a shifting narrative for the Macau gaming market, with analysts noting low growth rates following a strong rebound over the past two years post-COVID.
Analysts Jeffrey Kiang and Leo Pan predict that the sector’s gross gaming revenue (GGR) in 2025 will grow modestly by 4 percent year-on-year, reaching $29.3 billion. This forecast is lower than Seaport’s projection, which anticipates 8 percent annual growth.
Macau’s annual visitation reached nearly 35 million in 2024, reflecting a 24 percent year-on-year increase and 89 percent of the visitation levels seen in 2019.
For 2025, CLSA forecasts 4 percent year-on-year growth in tourism, bringing the total to 36.4 million visitors. In 2026, a 10 percent year-on-year increase is anticipated, driven by a rebound in mainland China’s property market, bringing visitation to 39.9 million -surpassing pre-COVID levels.
Additionally, the latest investment memo mentions that Macau delivered a seasonally low average GGR per visitor of MOP6,043 ($754) in 3Q24, which is expected to improve to MOP6,345 ($792) in 4Q. The forecast for 2025 suggests minimal growth, with GGR per visitor remaining almost flat at MOP6,483 ($809), followed by a marginal 1 percent increase in 2026 to MOP6,525 ($814) per visitor.
Commenting on the trend, analysts note that Macau’s gaming revenue per visitor has shown a clear correlation with China’s Consumer Confidence Index, which has been tracked monthly by the National Bureau of Statistics. Since Macau shifted toward a more mass-market focus following the anti-corruption campaign in the early 2010s, this correlation has remained strong, even during the years affected by COVID-related restrictions.
As of September 2024, China’s Consumer Confidence Index dropped to near a 34-year low, with a slight improvement in November 2024. ‘This aligns with a plateau in Macau’s gaming revenue per visitor in 2024,’ notes the reporting body. However, the research team believes that as property prices in China begin to bottom out, consumer confidence is likely to recover, with a rebound expected to take place in the second half of 2025.
Dividend payouts to grow
CLSA forecasts the sector’s total dividends to grow by 20 percent year-on-year, reaching $1.5 billion in 2025. This projection is based on the expectation that Sands China and Melco will resume dividend payouts. However, aggregate dividends are still expected to be 60 percent below 2019 levels.
While it remains uncertain whether Macau’s GGR growth will accelerate, analysts see potential for higher dividends in 2025. This is because the overall payout ratio from the free cash flow to equity (FCFE) remains low compared to the sector’s historical levels. Given that the sector’s organic growth has moderated in recent years, CLSA notes that a structurally higher payout would be welcomed by the market and justified. In particular, earnings and cash flow growth are anticipated in 2025.
Meanwhile, the brokerage forecasts the sector’s overall dividend payout (from FCFE) to decline from 45 percent in 2024CL to 36 percent in 2025. This is still well below the 91 percent payout from 2016 to 2019 and is attributed to capital expenditures on new properties, such as Wynn Palace, MGM Cotai, and Parisian Macao.
‘There is room for higher dividend payouts in 2025, as Galaxy is the only concessionaire with new projects coming online, including Capella and Galaxy Macau Phase 4 in 2027,’ the brokerage adds.
Sands China is expected to resume dividend payments in 2025, driven by the completion of Phase 2 of The Londoner Macao in April 2025. This phase, closely linked to existing properties in Cotai, is anticipated to spur a swift ramp-up in operations.
Satellite casino
As the transition period for significant elements of Macau’s current gaming law expires on 31st December 2025, there has been debate about the future of satellite casinos. CLSA notes that the continuation or discontinuation of these casinos will largely ‘depend on their performance rather than any legal consideration’.
Under the current law, satellite casinos are allowed to remain operational after 2025, but only if managed by casino operators, not concessionaires.
The key change will be in the remuneration system: casino managers will be allowed only to collect a ‘management fee,’ with no revenue-sharing arrangements with concessionaires. Additionally, once satellite casinos cease operations, they will not be allowed to reopen.
The 2022 amendments to the gaming law clearly outline that satellite casinos can continue business after 2025 as long as they are operated by casino managers. Satellite casinos are exempt from the requirement to be located on concessionaire-owned properties, meaning acquisitions of these premises by concessionaires are unlikely.
CLSA notes that it remains unclear how the ‘management fee’ will be set for casino managers. However, it is likely that the fee will be tied to satellite casinos’ performance in 2025, with potential adjustments linked to inflation. This could offer a balanced approach for both concessionaires and casino managers.
