Analysts note high-rollers visits Macau more frequently, engages in increased gambling activities

A report from Morgan Stanley Asia Ltd. describes how its analysis team visited the casino hub recently and found that high-end players are coming to Macau more often and gambling more. In spite of a sequential decline in overall consumption and macroeconomic data in mainland China, several operators have seen that high-end consumers are visiting Macau more frequently. The study claims that expenditure per head for premium mass gamblers remained greater than in 2019.

Morgan Stanley projects that Macau’s six operators will incur higher capital and operating costs in the upcoming year, mostly as a result of increased remuneration and government investment spending in Macau. Before 2025, the company does not anticipate a significant recovery in dividend payments from operators, as Macau casino businesses are anticipated to give priority to deleverage operations.

Additionally, analysts noted that some younger, new players in their 30s are spending about the same as more established players in their 40s and 50s. The organization predicts that in 2024, Macau’s concessionaires would increase wages by 2 to 3 percent, following the government’s lead in terms of business costs.

According to Morgan Stanley, there could be competition on casino sales and the operational expense component of non-gambling investments, which could lead to an increase in overall operating expenses for casinos. The brokerage projects that in terms of capital expenditure, non-gaming spending will rise in 2024.

According to Macau’s Chief Executive, Ho Iat Seng, the government anticipates that the city’s casinos would generate gross gaming revenue (GGR) of more than MOP180 billion (US$22.39 billion) by 2023. The new concession contracts stipulate that casino companies must enhance their total MOP108.7 billion non-gaming and overseas-marketing spending pledges to the local government by up to 20% if Macau’s annual GGR reaches or surpasses MOP180 billion.

Original story by: GGRAsia