Analysts: Gaming sector shows first genuine growth since Covid-19

Following the release of May’s gross gaming revenue (GGR) results, which hit a post-pandemic high of MOP 21.19 billion with a strong May Day Golden Week turnout. Brokerage JP Morgan Securities (Asia Pacific) Ltd reported a 3% year-on-year rise in GGR for April and May combined. Alongside a 2% quarter-on-quarter gain – contrasting the usual 2-3% sequential decline seen historically.

JP Morgan’s analysts DS Kim and Selina Li noted that even with some expected moderation in June, the second quarter of 2025 is likely to grow 2-3% year-on-year or 1% quarter-on-quarter, marking a “non-miss” quarter after a long period of sluggishness.  

The May figures represent the highest monthly GGR since before the pandemic, with mass and slot revenue tracking at 115% of pre-Covid levels and VIP revenue near 27% of 2019 levels.

Seaport Research Partners’ Vitaly Umansky forecasted a 3.4% year-on-year growth for June GGR.

Their note indicates despite a projected and conservative forecast, a 13.7% month-on-month decline would still be better than historical averages.

Umansky highlighted upcoming large concerts and the Dragon Boat Festival as potential drivers of visitation and revenue. Stating, “high-profile concerts are known to be a driver of quality visitation and therefore gaming revenues.”

From a profitability standpoint, JP Morgan observed signs of easing competition in Macau’s ultra high-end gaming segments, with operators maintaining current reinvestment levels. While increasing promotions is witnessed in other segments, overall operating expenses remain stable, suggesting steady margins and growth driven by topline revenue.

“Sands appear to be stepping up on promotions and free offerings (such as food and drink offerings on the casino floor), but this is more of a laggard catchup rather than an indication of rising competition, in our view.”

“Operating expenses remains very stable across the board (aside from the usual 4Q seasonality with higher spend), including concession-related non-gaming commitments. Overall, we expect margins to remain stable, with topline/GGR driving the EBITDA trajectory from here,” added the analysts.

First-quarter Macau GGR was nearly MOP57.66 billion, up 0.6% on the same period in 2024.