IRs’ non-gaming revenue projected to grow by 15%

Macau is succeeding in diversifying its economy away from gambling, with projections that non-gaming revenue could make up 15% of integrated resorts’ income by 2024.

According to analyst Vitaly Umansky of Seaport Research Partners, Macau gross gaming revenue is forecast to rise 26.1% to USD28.7 billion this year. At the same time, non-gaming revenue is expected to increase 17.7% to USD4.9 billion.

“This would see non-gaming equate to 15% of all revenues, boosted by concessionaire spending on non-gaming initiatives as mandated under their current 10-year concession contracts,” said a note by Seaport Research Partner analyst Vitaly Umansky.

The analyst has projected gambling revenue will grow to USD31.8 billion in 2025 while non-gaming climbs to USD5.3 billion, a slight decline to around 14% of total income.

“Property EBITDA for the industry is forecasted to rise 24.8% and 15.5% year-on-year in 2024 and 2025, respectively,” Umansky added.

Gaming revenues are also expected to rebound significantly in the second half of 2024.

“Macau GGR should surpass 80% of pre-Covid levels in the third quarter of 2024, and reach 83.3% in Q4,” Umansky said.

The analyst described June as “typically the worst or second worst month of the year,” contributing to an estimated 2% quarterly drop in GGR and EBITDA for Q2 2022. But Q3 is seen bouncing back to 80.6% of 2019 levels with Q4 at 83.3%.

“Macau remains a long-term secular growth,” Umansky said. “We do not see a slowdown and change in propensity to gamble by the core Macau customer base and Macau remains the funnel for servicing gaming demand in Greater China.” Victoria Chan