The 5.0-percent year-on-year increase in casino gross gaming revenue (GGR) in Macau was “better than expected,” surpassing the market’s consensus estimate, said two separate brokerages.
Macau’s casino GGR reached MOP21.19 billion (US$2.62 billion) in May, showed data released on Sunday by the city’s Gaming Inspection and Coordination Bureau.
The latest monthly figure was the highest monthly tally post-Covid, according to official data.
The May GGR result “comfortably” surpassed “the consensus estimate of +2 percent year-on-year,” stated JP Morgan Securities (Asia Pacific) Ltd in a Sunday memo.
“Recall, the bar wasn’t low, i.e., Street expectations were already adjusted upward – from an initial -1 percent year-on-year to +2 percent – to reflect the strong Golden Week, and the clean beat is impressive given the ongoing macro headwinds,” wrote analysts DS Kim and Selina Li.
They added: “The print translates into a recovery rate of 82 percent versus pre-Covid, the best since re-opening, and we estimate mass/slot has recovered to 120 percent to 121 percent versus VIP at 24 percent to 25 percent.”
Vitaly Umansky, senior analyst at Seaport Research Partners, wrote in a Sunday report that May this year had an extra Saturday, noting that weekend days “are generally 20-percent-plus higher in GGR than midweek”.
He further observed: “The Dragon Boat holiday was early this year, starting on May 31, rather than mid-June as was last year.”
A number of brokerages had earlier mentioned “strong gaming demand” at the beginning of the month, the time of a five-day mainland China holiday encompassing Labour Day on May 1.
Macau’s authorities said the daily average for arrivals during that early-May break – which ran from May 1 to May 5, and is also known as ‘May Golden Week’ – topped 170,000. That resulted in more than 850,000 arrivals in aggregate across the holiday season.
“The May Golden Week… was strong and the fall off following the holiday was not as large as some had anticipated,” stated Mr Umansky in Sunday’s note.
He added: “We conservatively estimate June GGR to be +3.4 percent year-on-year, -13.7 percent month-on-month.”
JP Morgan also noted that combined GGR for April and May was up 3 percent year-on-year, “translating into sequential growth of +2 percent – versus first-quarter run-rate – to buck the typical second-quarter seasonality of -2 percent to 3 percent quarter-on-quarter”.
The institution added: “Even with some moderation in June, second-quarter 2025 estimate appears to be the first ‘non-miss’ quarter in quite some time, likely growing by +2 percent to 3 percent year-on-year or +1 percent quarter-on-quarter”.
The “better-than-feared” first-quarter earnings season for Macau’s gaming industry and “two consecutive GGR beats” in April and May “have shown that the market demand and earnings are far more resilient than anticipated,” said the JP Morgan team.
“Our on-the-ground checks indicate a stable competitive landscape and consistent cost environment overall,” added Mr Kim and Ms Li.
They observed: “In the ultra high-end segments – specifically direct VIPs and super premium-mass – competition has stabilised since second half 2024 and into first quarter/second-quarter-to-date, with operators seemingly in an (implicit) agreement to keep current reinvestment levels.”
The analysts added: “For other segments, Sands [China Ltd] appears to be stepping up on promotions and free offerings (e.g., food and drinks on the floor), but this is more of a laggard catchup rather than an indication of rising competition, in our view.”
