Macau Casino Revenue Projections May Be Too Conservative, Analyst Suggests

Macau casino revenue projections may be too conservative
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Following an impressive performance in May, where Macau concessionaires posted the highest gross gaming revenue (GGR) since the start of the coronavirus pandemic, some analysts argue that revenue estimates for operators in the region might be overly conservative. Last month, the six Macau concessionaires collectively generated $2.5 billion in GGR, marking a 9% sequential gain, a 30% year-over-year increase, and a figure just 22% below May 2019 levels. Analysts had anticipated May 2024 GGR to be 24% lower than the same period five years earlier. Macquarie analyst Chad Beynon suggests Wall Street’s GGR estimates for Macau operators may be too restrained.

Strong Performance and Future Projections

Linda Huang, Macquarie’s Head of Asia Consumer Research, highlighted in a recent report that the sequential decline in May GGR compared to 2019 was likely due to a more rational promotional environment, particularly benefiting Galaxy and Sands China. “We believe the upward trajectory for Macau GGR growth remains intact post May’s result,” wrote Beynon.

Annual visits to Macau peaked at 39.40 million in 2019, but in 2023, that number was 28.21 million, indicating a significant recovery runway for Macau operators to return to pre-pandemic levels. Achieving this goal could greatly benefit Macau gaming equities.

June Outlook and Beyond

Expectations are high for another strong GGR performance in June, which could be beneficial for casino stocks, an asset class that typically sees declines in this month. Beynon forecasts Macau concessionaires will collectively generate $2.3 billion in GGR for June, implying a second-quarter GGR of $7.2 billion. If accurate, this would represent a 22% decline from the same period in 2019.

Beynon notes that operators focusing on mass-market clients and nongaming amenities could see significant benefits. Wynn Macau, a subsidiary of Wynn Resorts (NASDAQ: WYNN), has strong competencies in nongaming areas and is reducing its reliance on VIPs. “With additional operator revenue growth in mass and nongaming, we model margin upside despite higher operational expenditure commitments,” Beynon remarked. He believes consensus remains conservative, especially for WYNN, which he predicts can gain market share.

Bullish Outlook on Major Operators

In addition to Wynn, Beynon is optimistic about Las Vegas Sands (NYSE: LVS) and MGM Resorts International (NYSE: MGM), the other US-based Macau operators. He rates all three stocks as “outperform” with price targets implying an average upside of 32.3%.

This is particularly noteworthy for Sands investors since the company currently has no exposure to Las Vegas, unlike MGM and Wynn. “As a reminder, after factoring in minority ownership, casino revenue is comprised as follows: WYNN — 39% Macau, 44% Vegas, 17% Regionals; LVS — 57% Macau, 43% Singapore; and MGM — 11% Macau, 62% Vegas, 27% Regionals,” concluded Beynon.


Macau’s casino revenue projections may be more conservative than necessary, especially following a strong performance in May. Analysts like Chad Beynon see potential for continued growth, particularly for operators focusing on mass-market clients and nongaming amenities. With a bullish outlook on major players like Wynn, Sands, and MGM, the future looks promising for Macau’s gaming industry as it recovers and adapts to post-pandemic realities.