Macau GGR shows strong growth in May, analysts say

Macau’s gross gaming revenue (GGR) is surpassing April’s figures.

Macau.- Macau is experiencing a rise in gross gaming revenue (GGR) for the first three weeks of May, according to a report by analysts DS Kim and Mufan Shi from JP Morgan. Casino revenue for the period is estimated at MOP11.1bn (US$1.38bn), indicating a daily run-rate of MOP528m. This surpasses the figures seen in April, which averaged MOP491m per day.

While gross gaming revenue fell slightly to MOP450m per day last week, analysts believe the significance of the monthly and month-to-date trends outweigh this. The month-to-date numbers suggest mass demand is around 85 per cent of pre-Covid levels, while VIP demand has reached about 25 per cent. This compares to 67 per cent and 15 per cent, respectively in Q1.

JP Morgan’s analysts predict that Macau’s casino revenue for May will reach a new post-pandemic high of MOP15.5bn, exceeding April’s MOP14.7bn. This forecast implies a 60 per cent recovery in headline GGR, primarily driven by an 85 per cent recovery in the mass market.

Kim and Shi maintain a bullish outlook on the Macau gaming sector. They believe that better-than-expected fundamentals will eventually drive sentiment and stock prices higher. The Macau Economic Association has predicted that GGR for 2023 could surpass the government’s MOP130bn target for 2023.

GGR reached MOP46.36bn (US$5.75bn) in the first four months of the year, approximately 38 per cent of the target and half of pre-pandemic levels.

However, the association cautioned that the economic recovery is uneven, with small and medium-sized enterprises in non-tourism sectors yet to reap the benefits of increased visitor numbers. Several factors continue to impact Macau’s economic resurgence, including a complex external environment, weak consumer demand, and cautious investment markets. The potential effects of Federal Reserve interest rate adjustments on the global economy pose another challenge.