CLSA raises its 2024 gross gaming revenue forecast for Macau

Global stockbroker CLSA has increased its forecast of Macau’s gross gaming revenue (GGR) to $30.3 billion by 3.5% for 2024. The reason for this shift is that more people are visiting during typically slow months.

This updated estimate indicates that Macau’s GGR will rise from US$22.8 billion in 2023 to $34% annually. By 2025, CLSA expects an extra 5% growth to reach US$31.9 billion.

But CLSA has lowered its earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for the entire industry by 1% to 3%. The Londoner Macao in Sands China is undergoing Phase 2 renovations, and these disruptions and the competitive market have prompted this adjustment.

In a research report, analysts Jeffrey Kiang and Leo Pan said that although there are still socioeconomic problems, Macau tourism is still becoming more common. Despite lower VIP win rates in February, which affected monthly revenue, they highlighted the strength of the mass gaming market, enabling the first-quarter 2024 GGR to outperform sector predictions of MOP$57.3 billion (US$7.1 billion).

The analysts explained Macau’s resilience by pointing out that it caters to a smaller percentage of China’s population—less than 2%. But, they issued a warning, stating that concessionaires are projected to incur significant losses all year long due to their substantial investments in the face of intense competition.

Important companies including Galaxy, Melco, and SJM were acknowledged by CLSA for their strategic moves, which included the introduction of smart chips in 2024 to enhance premium player targeting and table turnover. In addition, it was talked about Galaxy’s plans to reorganize its sales force in response to its falling market share in the fourth quarter of 2023.

Original Story: Inside Asian Gaming