Macau casinos report highest post-pandemic GGR during October's Golden Week

Macau’s daily average gross gaming revenue (GGR) for the first eight days of October is estimated at MOP830 million ($103 million), surpassing all previous records since the lifting of COVID restrictions, according to brokerage firm Morgan Stanley. Visitor numbers to the gambling hub were bolstered by the 7-day Golden Week national holiday, which began October 1.

Between October 1 and 6, local casinos generated a daily average of over MOP930 million ($115.3 million) in gaming revenue, while from October 7 to 8, the rate stood at MOP500 million ($62.03 million).

In a Monday note, analysts DS Kim, Mufan Shi, and Selina Li highlighted that the figure indicates an 80% recovery in headline GGR compared to the National Day Golden Week in 2019. This acceleration in recovery surpasses the 70% mark achieved in the third quarter of the year. Meanwhile, mass GGR has recovered to 110 to 120% of 2019 levels, comfortably exceeding the buy-side expectations of a 100% bar.

Moreover, Macau casinos have witnessed a staggering 94% surge in the average wager per player during the recent Golden Week period compared to October 2019, according to a survey conducted by Citigroup on the premium mass market.

A site visit carried out by analysts George Choi and Ryan Cheung on October 5 unveiled that despite a 44% reduction in gamblers, the total wagers reached an impressive MOP15.53 million ($1.93 million). The figure is only 3% lower than the all-time high recorded in the past six years since the surveying began, as reported by Macau Business.

The survey identified a record-high number of 33 high rollers, often referred to as ‘blue whales,’ who are defined as players betting MOP102,993 ($12,779) per hand or more. This figure surpassed the previous record of 27 whales seen in February 2019.

Moreover, the quality of these whales has shown significant improvement, with an average wager of MOP197,091 ($24,454) among the 33 whales observed in October 2023. This represents an increase of MOP34,631 ($4,296) compared to the pre-Covid levels.

Furthermore, in recent weeks, stock pull-backs have led to a moderation in buy-side expectations, according to J.P. Morgan.

For Macau gaming stocks, the risk/reward ratio is shifting in a favorable direction, as the analysts observed significant value in these stocks that are currently trading at 10-percent free-cash yields and an average EV/EBITDA ratio of 9x (FY24E). This is two standard deviations below their historical levels, and the brokerage believes that long-term investors can start to bottom-fish around these levels.