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Gaming industry already achieving better than breakeven results – Brokerage

The local gaming industry is already achieving better than breakeven EBITDA at current revenue levels, analysts with Sanford C. Bernstein indicated in a 2021 gaming industry outlook.

The brokerage had previously informed that the first 10 days of January reported some MOP2.85 billion (US$357 million) in gross gaming revenues, at an average daily rate of MOP285 million, representing a 68 per cent year-on-year fall but a 13 per cent rise when compared to December 2020.

According to Bernstein, a stronger recovery in mass and non-gaming is expected, leading to an increased EBITDA profitability

‘In the early stage of recovery, we expect operators who have outsized relative positions in premium mass to fundamentally outperform (Melco and Wynn Macau top picks) over the next 6+ months, as premium customers are less affected by the economic impact related to COVID-19 and fewer numbers of customers are necessary to drive GGR growth,’ the brokerage issued on a note.

‘These operators have also shown relative underperformance over the past year and should see relative improvement. Sands and Galaxy will also benefit from their expanded focus on premium mass over the next year’

Bernstein also considered that the larger size of base mass customers returning to Macau will drive growth in medium and over the longer term, but that Junket VIP will likely continue to face significant headwinds in 2021 and into 2022.

Mass market casino gaming results including slot machines have jumped by 458 per cent in the last quarter of 2020 when compared to the previous quarter to some MOP14.2 billion, while VIP baccarat results – which represent most of high-end gambling – increased by 225 per cent quarter-to-quarter to almost MOP21.8 billion.

Still, mass-market games including slot machines provided 65.1 per cent of all Macau’s casino gross gaming revenue, a record high in local records since the beginning of the century.