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Macau GGR to reach $29 billion in 2024: Goldman Sachs

Macau’s gross gaming revenue (GGR) this year is expected to reach $29 billion, representing 82 percent of pre-COVID-19 levels, according to projections by Goldman Sachs.

The projections suggest that in the second half of the year, Macau’s GGR could increase by 14 percent year-on-year, amounting to a daily GGR run-rate of MOP638 million ($79.4 million).

In an investment memo previewing Macau’s 2Q24 results, analysts indicate that recent factors such as the April-May wealth downturn and Euro 2024 have temporarily impacted the city’s GGR.

Macau GGR June 2024

Looking at past European soccer cup seasons, Goldman Sachs estimates up to a 5 percent impact on GGR due to dilution from soccer betting. However, historically, Macau’s GGR tends to fully recover immediately thereafter in August-September. This year, the event will last until July 14th.

Meanwhile, the brokerage notes that the crackdown on illicit money exchange businesses has had little impact. ‘It should not significantly affect VIP or high-end premium mass-market GGR, as these players typically have their own sources of liquidity.’

‘For grind mass or low-end premium mass players, their liquidity needs should be covered by the daily RMB20K ($2,750) limit one can physically bring across the border and RMB10K ($1,370) per card via ATM machines. It is those who gamble or lose an amount in between who may be more affected if they cannot source liquidity from legitimate money exchangers in pawn/jewelry shops or elsewhere.’

Macau gaming

Sequential EBITDA decline of 4% in 2Q24

Due to softer June GGR, the brokerage anticipates that gaming industry EBITDA could decline by 4 percent in 2Q24 from the previous quarter.

Simultaneously, with Chinese travelers gradually broadening to other provinces, the GGR mix may shift towards higher-margin low-end premium and grind mass players.

‘This shift may be offset by higher promotional allowances reflecting a full-quarter impact of stepped-up promotional activities by Galaxy and Melco, although competitive intensity has somewhat eased in recent weeks.’

Galaxy Entertainment, Raffles Hotel, Macau

Galaxy EBITDA growth at the expense of Wynn 

Goldman Sachs calculates that Galaxy Entertainment’s EBITDA could increase by 9 percent sequentially, while Wynn and MGM China could see declines in EBITDA of 13 percent and 10 percent respectively.

Analysts noted that in previous analyses, Galaxy and Melco gained market share from Wynn and MGM in April-May by increasing promotional activities, leveling the playing field with MGM China while Wynn refrained from similar actions.

Galaxy and Melco’s market share regarding GGR slightly rebounded in June, with Galaxy’s share normalizing to 19 percent.

Despite The Londoner undergoing renovation, Sands China’s market share held relatively well at 24 percent, though estimates suggest it might have lost around $20 million quarter-on-quarter in non-gaming revenue.

Viviana Chan
Viviana Chan
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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