During a field trip that coincided with a Monday, casino floors in Macau were observed to be notably busy, according to banking group Morgan Stanley. The seasonally high activity was supported by noticeable foot traffic and vibrant casino operations. Analysts from Morgan Stanley, including Praveen Choudhary, Anson Lee, and Stephen Grambling, noted that the summer holiday period continued to drive substantial demand for the city's gaming venues.
They reported minimum bets at Galaxy Macau and Melco properties were between HKD1,000 and HKD2,000, while hotel accommodations in the area appeared heavily booked. This trend suggests that the high demand witnessed throughout the summer is expected to deliver notable gaming revenue increases.
Projected Revenue Growth and Financial Adjustments
The enthusiastic activity over the summer aligns with Morgan Stanley's positive outlook on the city's casino profits for the second half of 2025. The bank anticipates a 15% year-on-year growth in gross gaming revenue (GGR), which is higher than the average market predictions. This optimism stems partially from non-gaming attractions, such as concerts and sporting events, which are thriving, offering an upside to their forecasts.
While analysts recognize Macau's competitive landscape making margin improvements currently elusive, there is a belief that operating leverage and stock re-ratings are not fully reflected in current market consensus. Despite the challenges, dividend announcements from Macau-based companies like Wynn Macau Ltd, MGM China Holdings Ltd, and Galaxy Entertainment Group Ltd, signal positive shifts.
Wynn Macau notably offered the highest interim dividend, which was reported at HKD0.185 as of August 20. Though Sands China Ltd's interim dividend was lower than expected at HKD0.25, it was still a substantial 60% payout. Analysts suggest this reduction might be connected with a US$1-billion shareholder loan repayment to its parent company, Las Vegas Sands Corp.
Challenges and Opportunities in Macau's Casino Market
While the competition remains intense, which has impacted margin enhancements, Morgan Stanley forecasts the continuing GGR growth to bolster overall operations. Additionally, the cessation of the satellite casino licensing model by the end of the year, particularly affecting places under SJM Holdings' permit, could disadvantage SJM. Although SJM is set to receive more tables, some revenue loss is anticipated, potentially benefiting Sands and MGM as players.
Furthermore, the expansion of venues like Galaxy Entertainment's Cotai resort is projected to offer competitive advantages, potentially leading to shifts in market share. Despite limited increases in operational capacity among players in the near term, it’s expected that operators like Wynn and Galaxy might experience gains in market dominance. The ongoing developments highlight both the dynamic nature and potential growth within Macau's gaming and entertainment sectors.
Source: Competition in Macau still 'Fierce' but 2H GGR likely to grow 15pct: Morgan Stanley, GGRAsia, August 26, 2025.
Posted by Wizard
Aug 27 2025
Aug 27 2025
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