Decrying “weaker than expected spend” in mid-September in Macau casinos, Jefferies Equity Research analyst Andrew Lee forecast a limited recovery for gaming stocks, a downward shift from his previous viewpoint. Lee also blamed “lower-quality player bookings” for the Golden Week holidays in October, citing economic weakness in China.

In a September 23 investor note, Lee waxed more positive about Las Vegas Sands’s chances, saying it had “the most positive setup,” thanks to reinvestment in its properties and stability in the Singapore market. He also liked Galaxy Entertainment, thanks to its Hong Kong roots.

For the week ending September 22, Lee reported Macanese casino performance had dipped almost three percent to $65 million average revenue per day. For the rest of the month, that average is expected to be as low as $63.6 million per day and as high as $74.8 million.

Both mass-market and VIP play have been tracking lower. Mass-market customers were down between 11 percent and 14 percent, while high rollers were wagering 11 percent to 13 percent less, with a three percent win rate.

One whale was sighted at the Sands properties, playing large, since August. However, Cotai Strip resorts had seen a “meaningful” declivity in mass-market volume since the end of the summer holidays.

Lee predicted that September would be the weakest month of 2024 for gambling revenue. He lamented, “Furthermore, it appears that although Golden Week bookings have been solid in volume, the quality of players is weak.” This was dampening operator sentiment, described as less bullish than previously.

“We expect the negative macro context for China to continue weighing on valuations,” Lee wrote. He also heard negative commentary coming out of Macau regarding promotional warfare.

The analyst concluded by pegging Galaxy as the likeliest company to regain market share. Nevertheless, Lee remained conservative on the Macau-facing gaming group, no longer looking to Golden Week as a recovery catalyst.

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