Macau Casino Industry Receives Major Upgrades Following Recent Numbers

Some brokerages have revised their 2025 gaming outlooks due to the good trend in the Macau casino business.

In terms of gross gaming revenue (GGR), Macau casinos had its greatest month since the start of the COVID-19 outbreak in July.  The Chinese Special Administrative Region had a 19% increase in casino income.

Despite a nearly 24-hour travel ban in and out of Macau because of an impending typhoon, July's GGR total was nonetheless recorded.  Macau was spared by the weather event, and casinos continued to operate to provide refuge for both employees and tourists.

June's impressive performance, in which GGR increased 19% year over year, was followed by July.

After a sluggish start to the year, Macau casino wins have improved for six months in a row in 2024.  Morgan Stanley has changed its full-year projection in response to the better-than-expected GGR figures.

Expectations Have Doubled 

Morgan Stanley's Hong Kong office increased its 2025 GGR projections on Monday, just a few days after the release of the July Macau casino report.  Analysts Praveen Choudhary, Anson Lee, and Stephen Gambling changed their estimates from 5% to 10% year-over-year GGR increase as the recovery became more apparent.

According to its colleagues, the Morgan Stanley letter stated that the June and July figures "surprised us." The firm now projects full-year GGR to be approximately MOP249 billion (US$30.8 billion).  $29.5 billion was the previous estimate, which was predicated on a 5% growth rate.

"Macau has benefited from reductions in mainland and Hong Kong visitors to Thailand and Japan lately, and RMB strength has helped as well,” the Morgan Stanley note explained. “Our new estimate of +10% year-on-year would result in estimate increases and re-ratings as Macau moves from an ex-growth industry to growth. With China consumption still weak, Macau should provide welcome relief for investors.”

The 2025 projection was raised by brokerages other than Morgan Stanley.  Year-over-year growth was revised by Seaport Research Partners from 7% to 9%.  Seaport predicts that the combined casino earnings from the six operators will be $30.6 billion, which is little less than Morgan Stanley's estimate.  

Vitaly Umansky, a Global Gaming analyst at Seaport, attributed the robust GGR statistics to China's growing economy.  He claimed that the upper middle class, whom Macau casinos are now actively targeting, has been particularly elevated by the economic advances.

Macau's casinos have made MOP140.89 billion (US$17.4 billion) so far this year, a 6.5% increase.  Compared to this time last year, the six casino operators are more than $1 billion ahead.

Possibility of Purchase?

According to Morgan Stanley's report this week, shares of publicly traded casino companies in Macau may be ready for a purchase.  All four of the publicly traded casino companies in the United States have seen a surge in investor confidence.

Shares of Wynn Resorts, Las Vegas Sands, and MGM Resorts have all increased by 29%, 18%, and 3%, respectively, over the last six months.  However, Melco Resorts has benefited the most, with shares rising 65% since early February.