Macau’s gaming industry is expected to see low single-digit growth over the next few years, with total gross gaming revenue (GGR) projected to increase by 3 percent year-on-year through 2025 and 2026, according to the investment bank UBS.
In a report focusing on the 2025 outlook, UBS notes that future growth is largely driven by the mass market, particularly in the premium mass segment, which benefits from new hotel room supply and increased tourism initiatives.
The mass gaming segment is expected to grow by 3 percent year-on-year for both 2025 and 2026. Meanwhile, the growth in hotel room supply is seen as a key factor supporting the expansion of mass-market GGR.
Currently, the Londoner Grand Hotel, located in Sands China’s integrated resort, and the Capella Hotel, under Galaxy Entertainment, are set to open soon, contributing to a 7 percent year-on-year increase in room availability.
Both hotels are targeting premium mass players, as their hotel rooms consist mainly of suites rather than regular rooms. This added capacity will support the growing demand for premium mass gaming, a segment that continues to show promise in the post-pandemic recovery.
UBS also indicates that the expansion of tourism offerings is expected to further drive visitation to Macau, with new residency shows and other enhanced attractions adding to the destination’s appeal. Additionally, the number of cities eligible for the Individual Visit Scheme (IVS) has grown, with 10 new cities added in the first half of 2024.
UBS observes that visitors from these newly added IVS cities increased by 79 percent between June and September 2024, compared to the earlier part of the year.
Stimulus to offset macro uncertainties
Analysts also point to the importance of stimulus measures issued by Chinese authorities. While the global economic environment remains uncertain, there are expectations that potential stimulus from the Chinese government could help buffer any negative impacts on the Macau gaming market. This could provide additional support for the overall recovery and growth of the sector in the coming years.
On the cost front, UBS states that Macau’s gaming operators are likely to continue facing a competitive environment. However, a greater focus on the ‘efficiency of marketing expenditures’ is expected to lead to ‘more rational competition’, which should help stabilize EBITDA margins in the long term.
MGM and Wynn expected to lose market share
Recent revisions to Macau’s gaming market estimates show a downward trend in expectations for several key operators, with adjustments mainly driven by lower market share projections for MGM and Wynn.
For MGM, UBS has lowered its 2024 GGR forecast to $4.39 billion, a 2 percent reduction from its previous estimate, reflecting a weaker market share outlook. However, this new figure is 27 percent above 2019 levels.
Consequently, 2024 EBITDA estimates have been reduced to $266 million. Projections for 2025 and 2026 GGR and EBITDA were similarly cut, with the revised estimates for 2025 showing a 12 percent decline in GGR to $4.02 billion. MGM’s mass market share is now expected to dip to 14.3 percent in 2025 and 14 percent in 2026, reflecting stronger competition.
For Wynn Macau, GGR estimates for 2024 have been increased to $3.67 billion, still 31 percent below 2019 levels. However, projections for 2025 and 2026 have been cut, with a 6 percent reduction in 2025 GGR. Wynn’s mass market share is also expected to decline in the coming years.
Sands China, on the other hand, saw a slight upward revision for 2024, with its GGR now forecast at $6.85 billion, a marginal increase from the previous estimate. Despite this, EBITDA estimates for 4Q24 were raised by 6 percent to $633 million.
Sands is expected to benefit from the ramp-up of the Londoner Phase 2 project, which should help boost mass market share and drive strong EBITDA growth over the coming years. Projections for 2025 and 2026 also show growth, with GGR estimates of $7.53 billion and $7.93 billion, respectively.
