A New Realistic Path for Macau Casinos: Analysis and Predictions
Date: 2024-07-12 Author: Robert Beloved Categories: CASINO
Decline in Production Indicators
Analysts forecast Macau casinos will face challenges in the second quarter, predicting a 2% decline in gross revenue and a 7% drop in EBITDA. The reason for this is that China is stepping up measures to suppress illegal money exchanges.
Analytical Forecast
The first negative quarterly growth is expected in both gross gaming revenue (GGR) and corporate EBITDA since the post-COVID-19 reopening, according to Morgan Stanley. Bulk GGR could decline 2% quarter-on-quarter, reaching 113% of 2019 levels, while corporate EBITDA is likely to fall 7%, reaching 80% of pre-pandemic levels.
The main reasons for the slowdown are the crackdown on illegal foreign exchange and worsening macroeconomic conditions, which could continue into the third quarter, negatively impacting the Macau market. The expected visit of Chinese President Xi Jinping may also have an impact on the results of the fourth quarter, experts say.
Anti-Crime Measures
Macau authorities are actively cracking down on casino crime, including fraud and illegal gambling activities. Recent operations have resulted in the arrest of nearly 300 people, including charges of illegal gambling operations and fraud.
Despite the current challenges, analysts express confidence in the strong combined EBITDA margins of the six largest gaming concessionaires in Macau. Opportunities for development remain despite temporary difficulties, and the outlook for June remains positive.
Macau casinos enter the new quarter with a number of challenges, but with certain prospects for a stronger market in the long term. Strategic measures to combat crime and support economic stability remain important to maintaining the region's competitiveness on the global stage.
