According to reports, during the first nine months of this year, the Macau gaming sector generated about US$2.7 billion in premium-player rebates and player reinvestment, or roughly “17 percent to 18 percent” of Macau’s total gross gaming revenue (GGR), which was estimated to be around US$16 billion during the same period.
This is a drop from the average of 22 percent that went into player investments and refunds in the pre-Covid-19 period from 2017 to 2019, according to CLSA Ltd.
The industry’s move toward mass-focused play and the increasing competition between operators for premium mass players—which has led to higher rebates and reinvestments in 2023 thus far—were covered by CLSA analyst Jeffrey Kiang. The battle amongst operators for premium mass players is still severe, even with the surge in visitors visiting Macau.
Kiang claims that because of operational factors including higher player refunds, Macau casino operators now have less room for profit improvement. The performance of MGM China was used as an example; even though Macau visitation increased by 24 percent on a quarter-over-quarter basis, EBITDA has been back to pre-Covid levels since the second quarter, and the company consistently maintained an EBITDA margin of over 30 percent in the second and third quarters.
These reasons have led CLSA to lower its forecast for Macau-market adjusted EBITDA, which is expected to decline by 2% and 5%, respectively, to US$6.7 billion in 2023 and US$8.9 billion in 2024. However, CLSA stuck to its estimate that Macau’s casino GGR would reach US$22.5 billion in 2023 and US$29.2 billion in 2024.
Original story by: GGRAsia
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