Deutsche Bank analysts forecasted a positive outlook for Macau’s gaming market in 2025, despite geopolitical tensions and the return of Donald Trump to the US presidency, noting his known anti-China stance.
In its latest report, Deutsche Bank has revised Macau’s casino gross gaming revenue (GGR) growth forecast to 5.3 percent for 2025, softening from its earlier estimate of 7.4 percent. The bank’s analysts, Carlo Santarelli and Steven Pizzella, suggested that whilst Macau’s gaming market may experience a modest slowdown in 2025, it will remain robust.
Macau visitors grow 24% y-o-y
The report maintained that Macau’s long-term fundamentals remain attractive, citing sustained recovery in visitor numbers and mass market expansion, alongside expectations for continued growth in GGR and steady improvements in market fundamentals.
Macau’s visitor numbers grew by 24 percent year-on-year in 2024. Despite these gains, casino stocks underperformed in 2024. Deutsche Bank analysts attributed this to diminished profit margins, resulting from intensified competition in the mass market and geopolitical uncertainties affecting investor sentiment towards US-listed Macau operators.
Hotel room availability continues to constrain Macau’s recovery too, as renovation projects and limited development have kept room supply growth subdued, with 2024 ending with fewer rooms than the previous year. In midst of this, analysts anticipated a slowdown, primarily attributed to geopolitical concerns, including conflicts in the Middle East and Ukraine, as well as possible US-China tensions under Trump administration.
Trump tariffs not a concern anymore
The analysts highlighted investors’ concerns regarding potential geopolitical disruptions and the fierce competition that affected profitability in 2024. The report drew a particular attention to Trump’s influence, comparing the situation with 2018, when US-China trade tariffs coincided with a challenging period for Macau stocks.
However, the analysts noted that the diminished significance of the VIP market today renders such historical comparisons less relevant. The analysts explained that while US-China trade tensions hurt Macau’s high-roller market in 2018-2019, similar worries are less important now. According to the report, this is mainly because Macau’s casino industry no longer depends heavily on VIP gamblers, making it less vulnerable to US-China political tensions than it was in the past.
Trump’s inauguration is on 20 January. As the day approaches, analysts remain cautious about whether Macau’s gaming operators will face challenges similar to those experienced during his previous presidency, when US-China tensions peaked.
Subscribe to SiGMA’s Top 10 News countdown and SiGMA’s Weekly Newsletter to stay up to date with all the latest iGaming News, and benefit from Subscriber-Only Offers.
