May casino revenues to reach new high post-Covid

Casino revenue is forecast to reach a new post-pandemic high of MOP15.5 billion in May, which translates to an average daily casino floor income of around MOP500 million, according to JP Morgan analysts DS Kim and Mufan Shi.

In a note, it was stated that the month-to-date gross gaming revenues have already reached MO11.1 billion, according to the analysts’ estimates, which show a daily run-rate of around 85% of pre-Covid levels.

The figure represents an increase when compared to the recovery rates during the first quarter.

According to the analysts, last week’s revenues slowed down to around MOP450 million a day, “we’d again flag the potential margin of error in these weekly checks and would focus on monthly/month-to-date trends (versus just a single week).”

On the six gaming operators’ casino stocks that have been on a decline, both experts remarked, “We continue to believe – and hope – that better-than-expected fundamentals will ultimately drive the sentiment or stocks higher as the Street numbers move up, which in turn should further shave off valuations to ‘too cheap to ignore’ levels.”

Even analysts at Barclays expect the optimism to continue.

“This isn’t the end of Macau’s moment,” Barclays’ U.S. Gaming Leisure & Lodging analyst Brandt Montour wrote in a note last week.

Barclays believes Macau may be “more resilient,” than pre-pandemic, and Wynn is strategically benefitting more than other players in the region. According to its research, Wynn is outpacing other Vegas operators in room rates, table spend and slot play. LV