Macau’s gaming sector has seen a slowdown in early December, with gross gaming revenue (GGR) for the first eight days of the month reaching MOP4.5 billion ($562 million), or approximately MOP562 million ($57.7 million) per day.
According to investment bank JP Morgan, this marks a 9 percent drop compared to the daily rate in November, but the decline is in line with expectations given the heightened traffic controls and other precautionary measures in place ahead of President Xi Jinping’s anticipated visit to Macau next week.
Despite the slowdown, the gaming sector is still showing some resilience. According to recent data, the mass market GGR is running at around 105 percent of pre-COVID-19 levels, signaling a strong recovery in this segment. However, the VIP market is lagging, with recovery rates hovering in the low 20 percent range.
While these numbers are slightly below the recovery rates observed in the third quarter, they are not unexpected considering the reduced tourist activity and tighter controls in the lead-up to President Xi’s visit.
Modest growth expected in 4Q24
The outlook for the fourth quarter remains positive, despite the anticipated slowdown in December. Analysts DS Kim, Mufan Chi, and Selina Li note that GGR growth for 4Q24 is expected to range between 3-4 percent quarter-on-quarter, bringing the sector to its highest level in 20 quarters, following two consecutive quarters of decline. This growth would help the gaming industry meet consensus estimates for 4Q24 and the full fiscal year 2024— a result that analysts deem quite respectable, given the broader macroeconomic challenges.
The expected growth in 4Q24 represents a significant recovery from the downturn observed in the first half of the year and suggests stronger momentum as the sector moves into 2025. Despite ongoing uncertainties related to global economic conditions and potential policy shifts in the region, the gaming sector’s resilience in the face of such challenges remains noteworthy.
Meanwhile, earlier this month, Seaport released a similar projection, forecasting modest growth for Macau’s GGR in the final quarter of 2024. The firm expects a year-on-year increase of 8.6 percent, reaching MOP58.76 billion ($7.35 billion). While this is a positive outlook for the sector, the forecasted growth is somewhat lower than the 13.9 percent increase seen in Q3 2024, as year-over-year comparisons become more challenging.
For December, Seaport anticipates a 5.2 percent rise in GGR compared to the same month last year, with a more moderate month-on-month growth of 5.9 percent. However, this growth is expected to be slightly subdued due to the visit of Xi Jinping, which could lead to a weaker-than-usual week during his one-day visit.
Despite the near-term challenges, Seaport remains optimistic about the continued growth of Macau’s gaming industry. Analyst expects this momentum to continue into 2025. The combination of robust demand and the return of international visitors is expected to bolster the sector’s resilience in the coming year.
