Gambling revenue in Macau are no longer expected to recapture pre-COVID levels, thanks to a steep decline in high-roller play. That’s among the conclusions reached in a Tuesday investor note from Jefferies Equity Research.

Analyst David Katz was “reassured” by strong August revenues, following a weak July. But he believes that the casinos continue to be caught between a heightened promotional environment, as concessionaires compete for gamblers’ custom, and a deteriorating economy in China.

During August, Macanese casinos grossed over $2.4 billion, 14.8 percent stronger than in the comparable period of 2023. According to Katz, this is congruent with historical trends, which always see an August recovery after a summer swoon.

Even so, Katz predicted a “relatively slow” September leading into the Golden Week holidays in October, traditionally a halcyon period for casino winnings. Until then, promotional competition is anticipated to challenge Macanese casino operators.

As far as U.S.-run operators were concerned, the trajectories of recovery are highly varied. Katz foresees top-line growth for Las Vegas Sands of less than one percent, compared to MGM Resorts International’s 20.1 percent. The middle ground is occupied by Wynn Resorts, expected to see 10.5 percent revenue growth.

In the case of Sands, Katz pointed out that it’s hampered by extensive construction (at The Londoner), which puts considerable capacity out of action until year’s end. He noted that Sands has lost a percentage point of market share sequentially and Wynn has benefited by the same amount over the summer.

However, “We remain confident that an outsized portion of the recovery will favor MGM and partially Wynn,” Katz wrote. He was less confident about Sands, observing that the renovation disruption is ongoing and causing “lesser promotional support as a result.”

Taking a conservative view, Katz said the recovery in Macau is progressing, but at a slow pace. He cautioned, “The continued focus on promotional activities and reinvestment, which was highlighted during Q2 earnings, is expected to continue as operators try to maintain or increase market share.”

Katz continues to like Hong Kong-traded Galaxy Entertainment, in addition to MGM. He failed to see a needle-mover for Sands or Wynn at present.

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