Macau’s gross gaming revenue is seen growing by 8% year-on-year in 2025, driven by increasingly positive China sentiment towards Macau, the impact of improved visa policies and the strengthening of China’s economy, according to Seaport Research Partners.
A return to traditional money movement methods, including the use of Macau’s Union Pay pawn shops, in response to a crackdown on money exchange gangs is also seen boosting liquidity across the city.
In a Monday note, Seaport analyst Vitaly Umansky said the generous 2025 forecast comes despite what he expects to be a slower March quarter in which GGR is seen growing by 4.2% year-on-year – down 4.0% quarter-on-quarter – due to tough comparisons with 1Q24 having benefited from higher VIP volumes and hold rates.
“However, we still see continued growth in the industry through all of 2025 and currently estimate 8% year-on-year growth,” Umansky said.
Central to such strength will be the continued introduction of new stimulus provisions in China in 2025, seen as important in building consumer and business confidence. Shoring up the real estate market should be a core focus, which Seaport says has contributed to a drag on the economy and has significantly weakened consumer confidence.
“Our view on China economic strengthening and corresponding improvement in consumer and business sentiment could lead to stronger base mass recovery (with continued premium growth) in 2025, which leads to our estimate of 2025 GGR growth of 8%,” Umansky wrote.
This is seen working positively alongside a broadly positive view of Macau in Beijing, as seen by a raft of recent visa policies aimed at easing and expediting mainlander access to the Macau SAR.
These policies, announced steadily throughout 2024, have included faster visa processing times, the expansion of the Individual Visit Scheme (IVS) to incorporate 59 mainland cities and the implementation of multi-entry visas for arrivals from Hengqin.
Meanwhile, a crackdown on money exchange gangs over the past year has had some “marginal negative impact” on money flow into Macau, however Umansky believes 2025 will see a transition back to more traditional forms of money movement – including Macau’s proliferation of Union Pay pawn shops.
“Macau has experienced a rise of criminal activity related to illegal money exchange over the past year. This problem has been raised to a national level in conjunction with China authorities looking at continued use of cryptocurrency to move money out of China (not necessarily tied to Macau),” the analyst wrote.
“We believe this crackdown round has had some marginal negative impact on money flows into Macau and certain individuals have postponed their visits to Macau as a result.
“Other channels of money movement – including the Union Pay pawn shops which have been underutilized throughout 2023-2024 – are likely to help support liquidity in Macau in 2025.”
Seaport remains bullish on Macau gaming stocks, arguing their depressed levels continue to present strong risk/reward positioning. Wynn Macau and Melco Resorts are the research house’s top picks due to being under-valued, while Sands China and its parent Las Vegas Sands are preferred long-term on share gains in Macau, continued improvement in Singapore and increased return of capital to shareholders.
