Gaming_Gaming Industry Outlook

Summary of Gaming Industry Outlook Industry Overview - The report focuses on the Gaming Industry, particularly the performance and recovery of gaming revenues in Macau, Singapore, and Las Vegas [1] Key Insights on Macau - Macau GGR Recovery: Expected to recover to 80% of 2019 levels in 2025E and 82% in 2026E, up from 78% in 2024, 63% in 2023, and 14% in 2022 [2] - Mass vs. VIP Performance: Mass GGR projected to reach 115% of 2019 levels by 2025E and 119% by 2026E, while VIP GGR is expected to be 23% in 2025E and 24% in 2026E [2] - Capacity Recovery: Flight capacity has recovered to 77% of pre-Covid levels as of November 2024, up from 53% in 2023; ferry capacity at 71%, up from 61% in 2023 [2] Key Insights on Singapore - Singapore GGR Forecast: Expected to decline by 1% YOY in 2025E (at 121% of 2019 levels) and increase by 3% YOY in 2026E [3] - Historical Context: Pre-Covid visibility on Singapore GGR was low due to declines in VIP volume and increasing regional competition [3] Key Insights on Las Vegas - Strip Gaming Revenue Trends: YTD through November 2024, Vegas Strip gaming revenue was down 1% YOY, with total visitation down 2% compared to 2019 [4] - Passenger Capacity Growth: Las Vegas airline passenger capacity increased by 13% compared to 2019, indicating a potential for future revenue growth despite current declines [4] - Revenue Composition: Non-gaming revenues have become a significant part of profitability, accounting for over 60% of gross revenues for major operators like Wynn and MGM [16] Revenue Performance Metrics - Las Vegas Strip Gaming Revenue: - 2023 revenue was $8.9 billion, a 7% increase YOY, supported by record air passenger traffic [22] - Revenue excluding baccarat showed a 4% increase YOY in 2023 [22] - RevPAR Trends: - RevPAR improved to up 19% YOY in 2023 but has decelerated to up 1% YOY year-to-date through November 2024 [19] Additional Observations - Market Dynamics: The Las Vegas market is facing tough comparisons from a record 2023, with operators like WYNN and MGM highlighting challenges in Q4 and upcoming Super Bowl comparisons [4] - Baccarat's Role: Baccarat remains a volatile component of gaming, representing about 21% of total Vegas gaming revenues pre-Covid, indicating its significance in the VIP segment [24] Conclusion - The gaming industry is on a recovery path post-Covid, with varying performance across regions. Macau shows strong recovery potential, while Las Vegas faces challenges from tough comparisons and changing consumer behavior. Singapore's GGR is stabilizing but remains under pressure from competition. Non-gaming revenues are crucial for profitability, especially during economic downturns.