Macau’s strong May gross gaming revenue (GGR) results were ‘better than expected’, causing analysts at Seaport Research Partners to estimate that June GGR could be up by 3.4 percent yearly.
In May, the world’s largest gaming hub saw its strongest results since the onset of COVID, with GGR hitting MOP21.93 billion ($2.62 billion), up by 5 percent yearly and by 12.38 percent monthly.
Analyst Vitaly Umansky notes that the results were within Seaport’s estimate of a 5.3 percent yearly uptick but far ahead of Bloomberg’s estimate of a 1.9 percent uptick.
Umansky makes note that this year’s May had one extra Saturday, with weekend days generating 20 percent or more higher GGR than midweek – ‘for some operators even more’. The month was boosted by a strong Golden Week from May 1st to 5th, and the ‘fall off following the holiday was not as large as some had anticipated’. Additionally, the Dragon Boat festival started early this year, beginning on May 31st, rather than in mid-June last year.
June forecast
The May results are likely to cause a monthly drop in June’s results of up to 13.7 percent, above the ‘historical month-to-month average of 12 percent during 2008-2019’. June of 2024 saw GGR drop by 12.4 percent monthly.
However, the yearly comparisons could see a 3.4 percent uptick, according to conservative estimates by Umansky, nearing $2.28 billion, based upon a daily GGR estimate of $76 million.
The Seaport Senior Analyst notes that the month will see ‘several large concerts’, while the first two days of the month also include the Dragon Boat Festival Holiday.
The expert also notes that June of 2024 included the start of the UEFA Euro Cup, ‘which had a negative impact on GGR during the month’.
While the current estimate is considered conservative, Umansky warns that GGR ‘could be negatively impacted if any typhoons in the area impact travel into Macau (typhoon frequency begins to increase in June)’.
2025
The second half of the year is likely to outperform the first half, with expectations for 6.1 percent yearly growth in GGR, compared to a predicted 2.1 percent increase in 1H25.
‘Growth should be driven by increased marketing efforts by operators and improving consumer trends in China,’ notes the analyst.
Seaport predicts overall GGR growth in 2025 to be 4 percent.
‘Escalation of US tariffs remains an overhang and parts of the Chinese economy remain weak,’ notes Umansky. Expectations are for China’s policymakers “to more forcefully implement stimulative measures to help drive consumption and improve consumer confidence”. These are expected to ‘have a positive tailwind to Macau revenues’.
Additionally a March announcement by the mainland Chinese government to focus on boosting consumption and improving consumer confidence ‘is an important leading indicator of a strengthening China consumer and a driver of mass revenue growth in Macau in the future’.
This is welcome news, considering that the recovery in the bass mass segment ‘has been stubbornly weaker than anticipated’.
The analyst notes that overall mass is running at about 114 percent of 2019 levels, while VIP is at about 26 percent compared to the pre-COVID period. ‘Within mass, premium is about 47 percent above 2019, while bass mass continues to lag, about 17 percent below 2019’, according to Seaport estimates.
Importantly, within bass mass, while day-tripper business from Hong Kong and Guangdong is likely back to near pre-COVID levels, overnight base mass has been weak, likely below 70 percent of pre-COVID levels’.
Umansky notes that to drive growth in 2025 and 2026 ‘base mass recovery will be key’, with expectations for an improvement in 2H25 and throughout 2026, ‘as consumer confidence in China rises and the upper middle class base mass customers deploy their spending power’.
GGR is expected to grow by about 7 percent in 2026 and 2028, ‘but this could be higher’.
Over the next two years, Seaport predicts that MGM and Wynn are ‘likely to be the largest share donors’, while Sands and Galaxy gain share.
