[Photo; Yuki Lei]
Recent analysis suggests that Macau’s gaming revenue may be poised for recovery, as a report from Morgan Stanley indicates that January data shows signs of improvement.
However, experts caution that both the rapidly evolving gaming industry and the regional political landscape continue to pose significant challenges.
JP Morgan Investment Bank’s latest research indicates that Macau’s gross gaming revenue (GGR) showed signs of recovery in early January, alleviating market concerns about slowing demand.
The bank’s report, released last week, cited its own survey revealing that the GGR for the first 11 days of this year reached approximately MOP8.05 billion, averaging around MOP731 million per day – significantly higher than the performance observed at the end of last year, when daily revenues had fallen to approximately MOP620-630 million.
JP Morgan anticipates that Macau’s January GGR will grow by at least 15% year-on-year, potentially leading to a roughly 13% year-on-year increase in first-quarter gaming revenue.
The bank forecasts overall gaming revenue growth of approximately 5%-6% for Macau, along with profit growth of about 6%–7%, slightly surpassing the growth rate of gaming revenue during the same period.
Speaking with the Times about the recent rebound in Macau’s GGR, Steve Vickers, CEO of Steve Vickers and Associates, a political and corporate risk consultancy, expressed “cautious optimism” regarding the growth of the gaming income.
He noted that the reduction in satellite casinos has impacted overall gaming revenue but may also indicate a shift toward market stability. “As long as things stay stable in the geopolitical world, it will be fine,” he remarked, stressing his belief that stability in the geopolitical situation could allow Macau’s gaming and tourism industries to continue their steady growth.
Referencing JP Morgan’s report, which forecasts pressure on VIP room operations by 2026 with an expected year-on-year decline of approximately 5%, Vickers believes the mass market still holds significant growth potential.
He noted that the upcoming Lunar New Year holiday is expected to attract more visitors, further boosting revenue, but advised waiting until late March to accurately assess the impact of holiday traffic on overall performance.
In his presentation to the British Chamber of Commerce in Macao yesterday on the topic of “Strategic Risks in Asia in the Year of the Horse,” Vickers warned that competition between the U.S. and China may pose challenges to the sustained growth of Macau’s gaming and tourism industries. “Macau’s landscape is not only influenced by local dynamics but also shaped by broader geopolitical factors,” he stated. He further noted that ongoing conflicts and uncertainties in neighboring Southeast Asian countries, such as Thailand and Cambodia, could heighten regional tensions.
Vickers noted that while Thailand claims to be an ally of the U.S., the complexities of its military and political situation could lead to unpredictable outcomes.
Vickers predicts that while Macau will experience growth in GGR, the road ahead will not be smooth sailing.
He anticipates that challenges in China’s real estate market and potential geopolitical instability will significantly shape the economic landscape in the coming years. “2026 will be quite a tough year,” he noted in an interview with the Times on the sidelines of his presentation, adding that geopolitical factors and disputes between the U.S. and China will play a critical role in driving the market.
As Macau moves forward, the government’s commitment to developing non-gaming projects is considered essential for diversifying the local economy.
Vickers emphasized that increasing cultural and entertainment activities, such as performances and events, would help attract a new generation of visitors who may not prioritize gambling.
“Just having visitors come and take pictures for IG [Instagram] is okay, but not brilliant,” he pointed out, noting that relying solely on simple sightseeing is insufficient for sustaining economic growth. He suggested that Macau collaborate with regions like Hong Kong on joint tourism initiatives to collectively attract more visitors.
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