Moody’s predicts slow Macau recovery; Singapore, Malaysia rebound faster

Malaysia and Singapore are expected to recover faster than Macau.
Malaysia and Singapore are expected to recover faster than Macau.

Moody’s predicts that Macau’s GGR will reach 50 per cent of pre-pandemic levels.

Asia.- Moody’s Investors Service has predicted that Macau GGR will only recover to 45-50 per cent of pre-pandemic levels in 2023, rising to 60 per cent in 2024. It says Singapore and Malaysia are recovering faster with gross gaming revenue (GGR) estimated to reach 90 per cent of 2019 levels this year. 

Moody’s analysts note that the junket crackdown in Macau over the past two years resulted in a downturn in VIP revenue, with a shift in operators’ economic models to mass customers. Although the recent reopening of China is driving a strong recovery in revenue, Moody’s estimates a recovery in the mass-market segment, while strict regulations on junket operations will “keep the VIP segment sluggish”. 

The VIP segment accounted for about half of total GGR in 2019, but its share is expected to decline to about 10-15 per cent in 2023-24. The report also indicates that Macau operators that incurred more debt during the Covid-19 pandemic will face higher leverage than pre-pandemic levels.

The combined EBITDA of Macau gaming operators is expected to rise to around US$900m in 2023 and to US$2.1bn by 2024, compared with losses in 2022. Nevertheless, earnings will remain below 2019 levels due to the shrinking VIP business and ramp-up costs at new properties. Moody’s notes that it will take another year to achieve or surpass 2019 earnings. 

Analysts report that Singapore is expected to reach 2019 levels by 2024, while Malaysia is expected to surpass pre-pandemic levels next year and Cambodia’s NagaCorp is expected to see GGR of 43 per cent compared to pre-pandemic levels this year, rising to 60 per cent in 2024. 

They estimate that VIP play “will remain lacklustre over the next two years”, but that mass market revenue will rise to 90 per cent of 2019 levels this year and make a full recovery in 2024, while premium mass will hit 80 per cent this year and also recover next year.

See also: Tristan Sjöberg, TCSJOHNHUXLEY: “Casino legalisation in Thailand will redraw the mass-market Asian gaming map”

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