Citi Forecasts Decline in Macau's June and July Gaming Revenue Due to World Cup Impact

Citi has issued a research report indicating that Macau's Gross Gaming Revenue (GGR) is expected to experience a short-term slowdown due to the World Cup tournament scheduled from June 11 to July 19. Historical analysis suggests that major football events divert the gambling budgets of Macau's players. With this year's expanded tournament format featuring more matches—due to the addition of 16 participating teams and an extra round in the knockout stage—the impact could be more pronounced.

The bank forecasts that Macau's total gaming revenue will decline by approximately 10% year-on-year in June and by about 5% in July, before a rapid post-event recovery driven by strong pent-up demand. Despite this anticipated temporary slowdown, Citi maintains a positive outlook on Macau's gaming sector. The sector's current EBITDA valuation is roughly two standard deviations below its historical average of around 11.4 times.

Citi's strategy is to hold positions and look for opportunities to add during potential weakness. The report recommends building positions in GALAXY ENT (HKEX: 00027) and SANDS CHINA LTD (HKEX: 01928)—the bank's top picks—should their share prices exhibit short-term softness. Notably, GALAXY ENT, SANDS CHINA LTD, WYNN MACAU (HKEX: 01128), and MGM CHINA (HKEX: 02282) have all resumed dividend payments, offering dividend yields in the range of 5% to 7%.