Galaxy non-gaming may recover faster than GGR: Bernstein

July 13, 2022 Macau Earnings & Filings

Macau casino operator Galaxy Entertainment Group Ltd could see its non-gaming revenue recover to pre-Covid 19 levels more quickly than its gross gaming revenue (GGR), suggests brokerage Sanford C. Bernstein Ltd.

It makes that case in a Tuesday report that also reviews the gaming firm’s environmental, social and governance (ESG) commitments. The casino firm’s shopping mall operation (pictured) is at its Cotai flagship, Galaxy Macau.

Galaxy Entertainment’s gaming revenue could recover to pre-pandemic level in 2024, and expand to 118 percent of 2019 level in 2025, with a “vast majority” of the gaming revenue coming from the mass-market segment, said brokerage analysts Vitaly Umansky, Louis Li, and Shirley Yang.

“In comparison, we forecast the company’s non-gaming revenue to surpass 2019-level in 2023, and [be] 55 percent higher than 2019 in 2025,” they added.

Notwithstanding the current week-long pause of Macau’s casino resorts due to a community outbreak of Covid-19, and the patchy nature of recovery in tourism demand in the city, Galaxy Entertainment had been the only Macau gaming operator to see recently, a strong recovery in its retail mall business. This had helped it hedge some of the risks of “a constrained core gaming business”, suggested the brokerage.