Macau mass market gaming revenue expected to be up 200% for Q1

Four casino operators gained market share in Q4.
Four casino operators gained market share in Q4.

Morgan Stanley expects MGM China and Wynn Macau to lead rivals as mass market share gainers.

Macau.- Morgan Stanley has predicted that Macau’s mass market gaming revenue will increase by 200 per cent quarter-on-quarter to US$3.4bn (MOP27.5bn) in the first quarter of 2023. Revenue will represent 63 per cent of pre-pandemic levels and should lead to positive earnings before interest taxes depreciation and amortization (EBITDA) and free cash flow to equity (FCFE). 

It believes that of Macau’s six gaming operators, MGM China and Wynn Macau will gain the largest share of the market. The former has 200 more gaming tables and the latter has reported a 15 per cent gross gaming revenue market share.

According to analysts, Galaxy Entertainment Group should have the highest EBITDA recovery rate at 50 per cent of pre-pandemic levels, mainly due to its better cost controls and non-gaming segments. All of Macau’s gaming operators, except for Melco and SJM, are expected to generate positive FCFE in the first quarter of 2023.

Analysts also pointed out that Wynn Macau’s decision to issue US$600m in convertible bonds may prompt other operators to follow suit, as they prioritise non-gaming capital expenditure and benefit from higher interest rates and bond yields. The bonds are due in 2029 and the company anticipates net proceeds of approximately US$586m after deducting commissions and expenses.

In the fourth quarter of the year 2022, Galaxy Entertainment, Melco Resorts and Entertainment, MGM China Holdings, and Wynn Macau gained market share in terms of gross gaming revenue (GGR).

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