Potential Macau Gambling Revenue to Approach 90% of Previous Levels in 2023, Predicted Complete Recovery in 2024
Macau's 2023 gaming revenue (GGR) recovery is proving to be solid, reaching approximately 90% of pre-pandemic levels by the end of the year, S&P Global Ratings predicts. This marks a significant upgrade from their previous estimation of 75%-85% of 2019 levels.
Macau's GGR has shown a notable rebound, surpassing 86% of pre-coronavirus levels in the second quarter due to the high number of mass-market players. This is higher than the initial expectations which pointed towards a 75% recovery in Q2 of 2023. Based on this, S&P anticipates that mass GGR will hit around 85%-90% of 2019 levels by the end of 2023. A complete recovery is forecasted for 2024.
The economic progress is visible as demonstrated by the recent release of the July GGR numbers, which are the highest since the pandemic's onset.
Stalwarts Lead the Pack in Recovery
Out of the six concessionaires operating casinos in the Chinese enclave, not all contribute equally to the recovery.
Lawrence Ho's Melco Resorts & Entertainment (NASDAQ: MLCO) is seen leading the pack, with second-quarter Macau mass GGR at roughly 84% of 2019 levels. This coincides with the industry average. The operational growth is expected to persist due to the launch of additional facilities like the W Macau resort set to open in September with 560 rooms. The recent update on Studio City Phase 2 is also positive.
Melco has the advantage of not relying solely on Macau for its growth, as it also operates in the Philippines and, most recently, opened Europe's biggest casino in Cyprus. According to S&P, its EBITDA could reach approximately 70% of 2019 levels by the end of this year and fully recover in 2024.
Other Players Playing their Part
Besides Melco, Las Vegas Sands (NYSE: LVS) is another significant contributor to Macau's GGR. S&P upgraded Sands' credit rating to investment-grade during Q2. Its SAR operations have been robust, resulting in strong Q2 outcomes. Las Vegas Sands remains optimistic about Macau's long-term potential.
The remaining concessionaires contributing to the rest of the recovery narrative include MGM Resorts (NYSE: MGM) and Galaxy Entertainment (OTC: GXYEF). Both companies have shown positive quarterly reports and seem poised for a sustained growth trajectory.
Notably, Wynn Resorts (NASDAQ: WYNN) will reveal its second quarter earnings on August 24th after US markets close. Wynn Resorts houses Wynn Macau and Wynn Palace, high-profile casino hotels in the Chinese enclave.
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Source: www.casino.org
