When Macao releases October’s gambling revenue numbers next month, the report will come out just a few weeks before the sector announces its quarterly earnings, offering an early glimpse into how the six concessionaires are positioned heading into the final stretch of the year.
Due to the base effect from 2024, the October figure is unlikely to match the 17 percent rate achieved between June and August but should support the industry’s high, single-digit expectations set for 2025.
[See more: Macao’s casinos see a ‘golden week’ boost despite Typhoon Matmo]
The numbers should be particularly insightful. October data not only includes the residual impact from a late September typhoon, but also the subsequent storm which landed seven days later. The GGR could likewise shed light on whether October’s live events kept holiday traffic strong or saw a post-festivity slowdown.
Here are the three headlines to be on the lookout for:
Demand recovery remains on track
In a recent update, brokerage house CLSA forecast gaming revenues to top 23.1 billion patacas (US$2.88 billion) this month, reflecting an 11 percent increase. In comments sent to Macao News, investment analyst Jeffery Kiang said that even with flattish play over the Golden Week holiday, gaming revenue could tick higher if the second half of October matches September’s final week once typhoon-related closures are factored out.
At an estimated 680 million patacas (US$84.93) played per day, the 12.5 percent pickup in GGR during the third quarter should translate into 10 percent growth in earnings before interest, taxation, depreciation and amortisation (EBITDA) for the industry, CLSA writes, demonstrating sustainable momentum after daily gaming touched 672 million patacas (US$83.93) in the second quarter.
[See more: JP Morgan cuts Macao’s October GGR forecast amid ‘golden week’ disappointment]
But while the outlook is underpinned by a 15 percent visitation jump seen in July and August, along with a 2.3 percent point rise in average room occupancy for five-star accommodations, Kiang anticipates luck-adjusted EBITDA margin compression on account of Typhoon Ragas, which suspended casino operations for 33 hours and pushed payroll costs higher at month’s end.
Tightening links between mega events and GGR
Following a record-breaking August and over a million visitors across October’s “golden week” break, the NBA China Games took place less than 48-hours after the Mid-Autumn Festival, filling out a 14,000-seat arena on consecutive nights. The sporting affair overlapped the Jackson Wang concert, drawing in approximately 35,000 fans across three performances.
Both events serve as a litmus test for gaming operators, signalling whether the high-profile draws sustained early-month gaming momentum. “The tail-end strength of GGR post-Golden Week will remain an ongoing focus throughout October,” Kiang says, as the industry looks to reach the 200 billion patacas (US$24.98 billion) level before November.
[See more: IMF downgrades Macao’s economic outlook amid global shifts]
GGR recovery should support industry EBITDA expansion on both a quarter-on-quarter and year-on-year basis. However, even though a larger proportion of mass players relative to VIP gamers is margin accretive – since fewer junket fees need to be paid – hardly anyone is pencilling in margin expansion as competition to draw in those customers should raise operational expenses, Kiang explains.
Macao’s gaming revenue is still outpaced by visitor growth
The pickup in Macao’s October gaming revenue coincides as national demand remains tepid. Golden week sales for key retail and restaurant enterprises were 2.7 percent higher than a year ago, according to a research brief by Morgan Stanley citing the Ministry of Commerce. Even with traffic and sales in key business districts up 8.8 percent and 6 percent respectively, this remains a slight deceleration against the 3.4 overall retail sales growth in August. The investment bank also noted that a 16.1 percent surge in domestic travellers outpaced the 15.4 percent rise in total tourism revenue, resulting in lower per capita spending.
With visitor arrivals outpacing gaming revenue, similar dynamics could unfold in Macao, especially as the industry deepens its shift from VIP gamers to mass-market players. To address the spending gap, Niall Murray, founder and chairman of Murray International Group, highlighted during his speech at Thursday’s BritCham event the untapped potential of Macao’s MICE industry, pointing out that the city is currently capturing only a third of its potential capacity and missing out on the higher spending power of MICE attendees who typically spend three times more than the average visitor.
[See more: Macao’s non-gaming ambitions face structural hurdles that constrain its potential, BritCham speaker says]
Schedule congestion has also long been a concern when multiple attractions overlap on weekends. This challenge comes as the city actively works to expand beyond the entertainment sector, a point emphasised by Las Vegas Sands chief operating officer Patrick Dumont during a fireside chat with Joe Tsai, David Beckham, and moderator Vince Carter this past Sunday. The Dallas Mavericks owner praised Macao’s “good assets,” noting that a complementary shift from leisure to business would mark a positive step forward for the city, helping bring in more foot traffic to address off peak demand.
