The Macau government’s recent estimate that industry GGR will reach MOP$240 billion (US$30 billion) in 2025 could be wildly understated given its track record of underestimating gaming revenues, according to Citigroup.
Releasing its deep dive into the Macau gaming market on Wednesday, Citi analysts George Choi and Timothy Chau said they expect GGR to climb 7% year-on-year to US$30.4 billion – and EBITDA by 13% to US$9 billion – in 2025, driven by visitation growth, the rollout of smart gaming tables and the rising popularity of new side bets.
While Citi’s estimates are not much more than government’s own forecast, the analysts suggest revenues could be considerably higher given the government’s track record of underestimating GGR. Specifically, they noted that the government has underestimated GGR in nine of the past 10 years (2011-2019 and 2023) by between 10% and 60%.
“If history repeats itself, then there could be some significant upside risk to Citi’s GGR forecast,” they wrote.
FY25 growth will come partly from an increase in visitation, both organic and thanks to the addition of new cities to the Individual Visit Scheme this year, however smart tables will play a huge role moving forward as they allow the casino operators to do more targeted player marketing, which will lead to reduction in comp wastage, Citi said.
Based on its calculations, Citi believes a player’s theoretical GGR will increase by 5.9% on efficiency alone, given that smart tables enable more hands per hour, while the growing popularity of side bets – also made easier to offer thanks to smart table technology – can massively enhance a player’s value.
“A player with a tendency to place 10% of their wager on Lucky 6 is worth 125.5% more than a player who bets strictly on main bets,” Choi and Chau said.
Delving deeper, the analysts explained, “The use of smart gaming tables and RFID chips will help casinos accurately record gaming volumes for each of the players. ‘Seasoned’ players will find it almost impossible to mislead casinos on their actual gaming volumes (they will place a bigger-than-usual bet when the pit boss is around, hoping to earn more comps than what their actual gaming volumes would suggest), and this means comp waste and manipulation would be eliminated.
“Smart gaming tables will also enable casinos to capture the real value of the players via the data collection of their playing behavior. Specifically, smart gaming tables can accurately capture players’ tendency to make side bets. Simply put, the higher the player’s tendency of placing a side bet, the higher the player’s “theo” is. If these higher-value players are appropriately comped, they will be less likely to switch to another casino.”
