Macau’s Casino Industry Set for Full Recovery by 2026

Macau, SAR—Macau’s casino industry, a global gaming powerhouse, is on track to return to pre-Covid levels by 2026, according to industry analysts. The city’s gaming revenue is expected to grow significantly this year, spurred by improved visitation and a strengthening economy. Despite a slight dip in December, analysts remain optimistic about the future, projecting a steady recovery and growth.
A Mixed December for Macau’s Casino Revenue

In December 2023, Macau casinos reported a 2% decline in gross gaming revenue (GGR), which totaled MOP18.2 billion (£1.813 billion/€2.184 billion/$2.27 billion). This marked the first monthly dip in GGR since the city reopened in January 2023. Analysts attributed the drop to the three-day visit of Chinese President Xi Jinping, who was in Macau to celebrate the 25th anniversary of its return to Chinese rule and to inaugurate the city’s new chief executive, Sam Hou Fai, on December 20. The timing of these events likely impacted visitor numbers and casino activity during this period.

Bounce Back Season

Despite the December dip, Macau’s overall GGR growth for 2023 was strong. The city saw a 23.9% increase in GGR, reaching MOP226.78 billion, surpassing the official target of MOP216 billion. This represents approximately 78% of the MOP292.5 billion generated in 2019, the year before the Covid-19 pandemic. Analysts such as David Katz from Jeffries are optimistic that Macau’s gaming industry will return to pre-pandemic levels as soon as 2026, fueled by economic growth and tourism.

Katz highlighted several key factors that will help drive the recovery, including monetary policy initiatives aimed at improving consumer health in Macau. These measures, combined with stronger tourism and a burgeoning mass-market gaming segment, are expected to propel the city’s casinos back to full strength in the coming years.
Tourism Surge Boosts Optimism

Tourism is a key driver of Macau’s gaming revenue, and analysts expect a strong year ahead. The city is anticipating 35 million visitors in 2025, a nearly 25% increase over the previous year. Mainland China will remain the primary source of visitors, with relaxed visa policies enabling longer stays. However, international tourism is also on the rise. Last year, more than 2.4 million visitors from outside Asia came to Macau, a 66% increase compared to 2022.

To further attract tourists, Macau has invested in expanding its non-gaming offerings, including sporting and cultural events. The city is actively promoting these attractions at global events like the ITB Berlin travel trade show, set for March 2024, which will help boost its international appeal.
Strong Economic Outlook for 2025

Macau’s economic recovery is expected to continue into 2025, with positive indicators suggesting growth across various sectors. Last year, Fitch Ratings forecast an 8% increase in the city’s GDP for 2025, driven by the revival of the gaming tourism sector and favorable policy initiatives. Analysts George Xu and Jeremy Zook from Fitch noted that expanded capacity in gaming operations and a strong policy framework would support this growth.
Exceeding Revenue Targets in 2024

Looking ahead to 2024, the Macau Gaming Inspection and Coordination Bureau (DICJ) has set an official GGR target of MOP240 billion. However, analysts from Citigroup are more optimistic. In a recent report, Citigroup’s George Choi and Timothy Chau predicted a 7% year-over-year increase in GGR, bringing the total to MOP244 billion. They also forecasted a 13% rise in earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2025.

Citigroup’s analysts noted that the DICJ has historically underestimated the city’s GGR totals, suggesting that there may be considerable upside potential to their forecasts. The increased use of smart tables in casinos is also expected to help operators better understand player behavior, leading to more efficient and profitable operations.
Conclusion: Optimism for Macau’s Casino Industry

 

Macau's gaming industry is expected to return to pre-Covid levels by 2026, fueled by stronger tourism and favorable economic policies.

The Future of Macau

As Macau heads into 2024, the outlook for its casino industry remains bright. While December’s decline in revenue was a minor setback, the city’s gaming sector is expected to continue its post-Covid recovery, with analysts predicting that it will return to pre-pandemic levels by 2026. Strong tourism, expanding non-gaming attractions, and favorable economic policies are all contributing to the city’s optimistic forecast. If these trends continue, Macau’s casinos could exceed expectations in the coming years, making it one of the world’s most resilient gaming hubs.