The unexpected resurgence of Macau gaming revenues over the past two months, which culminated in June GGR smashing consensus at 19% year-on-year growth, appears to have been supported by the performance of the high-end gaming segments, according to investment bank JP Morgan.
Analysts said in a Tuesday note that their on-the-ground checks indicate direct VIP and ultra-premium mass performed particularly well throughout the month, enough to drive June revenues back to 88% of pre-COVID levels – by far the highest recovery rate since the pandemic.
The June result also saw combined Q2 GGR come in 8% higher year-on-year and 6% higher sequentially at MOP$61 billion on the back of a similarly impressive May.
So, what drove the high-end gaming performance? According to JP Morgan’s DS Kim and Selina Li, key factors appear to have been the success of marquee concerts and events – specifically Jacky Cheung’s ongoing residency series at Galaxy Arena and three concerts by G-Dragon at the same venue early last month which helped offset the weak seasonality.
The analysts also point to improved sentiment among high-end patrons, perhaps due to positive wealth effects from stock markets, and the continued ramp-up of Capella Macau – the uber-luxury all-suite tower at Galaxy Macau that soft-opened in late April.
As such, VIP gaming is estimated to have been the fastest growing segment in Q2.
Ahead of company results announcements for the June quarter commencing towards the end of July, Kim and Li said they expect industry EBITDA to have improved by up to 4% quarter-on-quarter to reach 83 to 85% of pre-COVID levels, versus 79% in 1Q.
“We believe EBITDA growth may be a bit slower than GGR growth due to the mix shift towards high-end segments and likely higher promo and reinvestment for high-end patrons,” they wrote.
“Having said that, 2Q25 will mark the first quarter in a long while to beat the Street forecasts and historical seasonality – hopefully inflecting consensus momentum higher after 18+ months of downgrades, finally.”
The investment bank has set its early July forecast at high-single digit growth.
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