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US – Extra tables to see MGM China hit pre-pandemic mass gaming levels first

By - 16 March 2023

Morgan Stanley believes MGM China and Wynn will lead the charge of Macau’s casinos return to pre-pandemic mass gaming revenues.

MGM thas the added advantage of having an extra 197 new gaming tables which came into operation at the start of the year, taking its total to 750 tables compared to 553 before the pandemic.

Analysts Praveen Choudhary, Gareth Leung and Stephen Grambling said the two operators made the biggest gains in mass market share in the first quarter of the year.

Morgan Stanley believes MGM China will generate mass market GGR of US$522m in the first quarter of the year, representing 101 per cent of its 2019 revenues. This would take its mass market share to 15.3 per cent, compared to 10 per cent in 2019.

It believes Wynn Macau will reach 76 per cent of 2019 mass market GGR giving it a market share of 15 per cent.

The analysts said: “Better mass market share translates into better EBITDA recovery. We expect MGM China and Wynn property EBITDA at US$97m (47 per cent of 1Q19) and US$148m (38 per cent of 1Q19) respectively.”

It added that Galaxy Entertainment will record the best EBITDA recovery rate at 50 per cent of pre-pandemic levels.

Across the whole sector, Morgan Stanley believes mass revenue will increase 200 per cent quarter-on-quarter to US$3.4bn in the first quarter, coming in at 63 per cent of pre-pandemic levels.

“At this level of mass revenue, the industry should be making positive EBITDA and FCF (free cash flow), in our view,” they said.

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