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HomeIntelligenceDeep DiveMacau gaming demand holds steady despite macro headwinds: Goldman Sachs 

Macau gaming demand holds steady despite macro headwinds: Goldman Sachs 

Macau gaming operators have acknowledged macroeconomic challenges, including a consumption slowdown impacting tenant sales at their shopping malls. However, they maintain that gaming demand has remained resilient across all segments, with steady bet sizes and a continued increase in player count.

This assessment was shared by investment bank Goldman Sachs following an investor tour in Macau on September 13th, during which the team visited various casinos and met with senior management from the operators.

Despite the positive outlook for gaming demand, some operators have noted that ultra-high rollers have become “more cautious” with their spending.

Goldman Sachs also highlights that casino operators in Macau expect minimal impact from the government’s recent crackdown on unlicensed money exchanges, which is not a new issue. Despite stricter measures, gross gaming revenue (GGR) has remained resilient, tracking at 76 to 81 percent of 2019 levels.

The crackdown primarily targets illegal POS machines brought over the border, following serious criminal cases linked to these activities. Nevertheless, pawn and jewelry shops are expected to continue operating, with renewed permission for concessionaires to conduct money exchange services within casinos.

Macau, Sam Hou Fai gaming operators

In other developments, senior management from Macau’s six casino operators recently met with Chief Executive candidate Sam Hou Fai. During the meeting, he reaffirmed the government’s focus on non-gaming diversification. In this context, some operators believe ‘developing Hengqin could become a more important priority in the upcoming government term. If successful, Hengqin’s development could help resolve capacity issues Macau is facing in relation to a lack of land, hotel rooms, etc.’

Overall, recent supportive measures, such as adding 10 new Individual Visit Scheme (IVS) cities and relaxing duty-free shopping quotas, underscore the government’s commitment to the region’s long-term growth.

Macau tourism

While Trip.com management noted in recent investor meetings that Macau and Hong Kong have become less popular destinations for Chinese tourists, this trend has not yet been reflected in hotel bookings for the upcoming Golden Week holidays.

Both Galaxy Entertainment and MGM China reported that over 90 percent of their hotel rooms have already been filled, indicating continued healthy travel demand to Macau.

Operators remain optimistic despite a shorter booking window this year due to the separation of Golden Week and the Mid-Autumn Festival

Galaxy, in particular, is preparing for a busy October, with events such as Andy Lau’s four-day concert, which has seen overwhelming demand. However, tenant sales in retail remain a challenge, with Galaxy experiencing a 10-20 percent year-on-year drop in retail rent for the third quarter. 

Goldman Sachs observes that if this trend continues, Sands China could also see an impact on its retail rent in the fourth quarter.

Macau, casino, Gambling

Competition stabilizes as operators maintain spending

Macau’s gaming competition has stabilized after Galaxy and Melco Resorts ramped up marketing efforts to compete with MGM in the premium mass segment. While Sands China temporarily increased reinvestment rates to retain players during disruptions from Londoner Phase 2, the company and Wynn Macau remain cautious about aggressive spending. Wynn continues to focus on competing through enhanced services and products rather than heavy marketing.

Goldman Sachs notes that all operators expect operational expenses (opex) to remain steady, though some seasonal volatility is anticipated. Despite recent market share losses, MGM China maintains its goal of achieving a mid-teen percentage of GGR market share. At the same time, Galaxy aims to grow its current 20 percent share, particularly with the upcoming opening of Capella Hotel. SJM also plans to increase its Grand Lisboa Palace market share to 5 percent in the long term.

Thailand, casino law, Integrated Resorts, Integrated Entertainment Business Act

MGM China and Galaxy eye Thailand’s IR

The legalization of integrated resorts (IR) in Thailand is progressing and could potentially be approved by the second half of 2025, according to recent reports. The proposed framework suggests a 30-year license term with five-year reviews and the possibility of up to seven IR projects across the country, including three major ones in Bangkok. This presents significant opportunities for international operators to bid for licenses.

In Macau, both Galaxy Entertainment and MGM China have shown considerable interest in the Thai market. MGM China, in particular, views the Thailand IR project as a strategic fit due to the overlap in clientele, noting that Thailand is a popular destination for mainland Chinese travelers. This alignment could enhance synergies and business prospects for MGM’s Macau operations.

Galaxy also sees potential in the emerging market, reflecting a growing interest among Macau-based operators in expanding their footprint in Thailand.

Viviana Chan
Viviana Chanhttps://agbrief.com/
Viviana Chan is an editor, interpreter, and journalist. With over a decade of experience, she writes in English, Chinese, and Portuguese. Viviana started her career in Macau-based newspapers, where she became passionate about the region's social, financial, and cultural development. Her writing focuses on the economy, emerging industries, gaming development, political affairs, and cross cultural-exchange in the business and cultural domains. She is avid for news and eager to discover and cover stories that generate public relevance.

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