Analysts Predict 2019 Revenue Slowdown For Macau

Several notable iGaming analysts from top-tier financial companies have shared their estimates of Macau’s yearly gross gaming revenue for 2019, and almost all unanimously agree that a certain deceleration is in cards.

The most pessimistic of them, Morgan Stanley experts, forecast a 2% year-on-year slump this year, which would also mark the first time the annual decline has happened since 2015.

As for the reasons why they believe so, they cite the poor VIP sector results, poised to take a 6 percent annual nosedive. The other factor accounted for is the slower growth of a mass market, of about 2 percent.

The Problem of License Renewal

These estimates may seem difficult to grasp, especially looking at past year’s record…

…in 2018, Macau’s gaming revenues rose by 14% to $37.57 billion, making a 2019 decline of 2% seemingly very unlikely. The company does admit that November and December results were exceeding expectations which could make this entire year “inflection point for long-term outperformance.”


Morgan Stanley argues that if there is “one key overhang,” it is the license renewal which “keeps valuation multiples lower than long-term averages.” They went on to elaborate:

“While we remain bullish on the prospects for all six concessionaires to keep their licenses, the market may continue to fear the unknown. Worse still, any licensing decisions may not be made until 2021 (after extending SJM/MGM for two years).”

They further indicated that Macau’s growth boils down to improving infrastructure and low penetration and that they see the cyclical slowdown in 2019. “We change our industry view to In-Line from Attractive due to tightened liquidity, full smoking ban pressuring VIP and premium mass growth in 2019, and potential decline in EBITDA YoY growth in 1Q19.”

Their namesake, JP Morgan, is of more optimistic outlook…

…They too agree that Macau’s GGR hey-days are gone and that 2019 won’t see the double-digit rise in revenue – but they still do forecast a rise.

Their analysts, DS Kim and Sean Zhuang say that the gross gaming revenue rise will be below 10%, although they still hold it possible that the double-digit growth will return in 2020.

In a matter of a year or two, licenses will expire for a large number of key operators such as SJM Holdings, MGM China, Sands China, Wynn Macau, Galaxy Entertainment and Melco Resorts. Sands, Wynn and MGM make for 60% of Macau’s market, which makes it very obvious how hazardous their eventual leaving would be.

The government of the world’s biggest gambling hub is expected to impose higher license extension costs and taxes, as well as some new regulatory conditions.

To top it all off, the ongoing trade war between China and USA could make matters even more difficult for Macau.

Investors in Macau have already been warned that January aggregated revenue may remain static, following a lower than expected turnover during the first week of the month.


“2019 could see gross gaming revenues 2 pct yearly drop – Brokerage”, Nelson Moura,, January 7, 2019.

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