A new report from Fitch Ratings forecasts the global gaming outlook for 2024 as “neutral”. It is the second straight year Fitch has selected a “neutral” view for its gaming outlook.
Fitch cited “slight pullback” from the “pent-up demand” in the United States as one of the reasons for its classification.
In general, the US is still performing well after a “robust” 2022. However, Fitch’s 6 December report details how regional gaming is showing some indication of stagnation.
Elsewhere, Asia Pacific is flourishing under improved demand thanks to the mass market returning after the Covid-19 pandemic. Singapore, meanwhile, continues to “perform above expectations”.
Limited regulation in the Middle East and Africa (part of EMEA) is proving beneficial, alongside the rise in US online profitability.
Over in Europe, The UK Gambling Act review is expected to be “implemented over the medium-term”. Aggregated, it is expected that that EMEA companies focused on the UK will likely have lingering regulation worries eased next year.
The “increasing profitability” in the US online sports betting market will also likely become favorable for those with access to it.
Fitch outlook: Macau an area of growth
Fitch expects Macau to be a big story in 2024 as “visitation continues to grow”. This is despite the issues with the Chinese economy.
Gambling revenue in Macau reached MOP$16.04bn (£1.56bn/€1.83bn/US$2.00bn) in November, the fourth highest monthly total so far in 2023.
The year-on-year growth comes as a result of the removal of restrictions related to Covid-19. Melco Resorts & Entertainment, one of the leading casino operators in Macau, reported a major upturn in revenue thanks to restrictions being relaxed in the region.
In Q3, revenue hiked 320.6% to US$1.02bn. Casino was the catalyst for this growth, with revenue jumping 346.2% to $812.1m.
Las Vegas facing potential issues
Fitch predicts the slowing of “pent-up demand” to become a problem in Las Vegas, facing a potential decline in 2024 despite breaking numerous revenue records this year.
The customer mix potentially pivoting to “more non-gaming customers” is also anticipated to prove a stumbling block.
BetMGM, a leading operator in Las Vegas, recently announced it was expecting to deliver $500.0m (£396.1m/€462.2m) in positive EBITDA by 2026, while also aiming to reach 25% market share in the US.
BetMGM set the 2026 target having revealed it’s expecting to be at the higher end of its 2023 guidance. CEO Adam Greenblatt says in the current financial year, revenue should be between $1.80bn and $2.00bn.
While Greenblatt was optimistic over BetMGM’s Q3 results, Goldman Sachs highlighted the stagnation the operator is currently experiencing.
In its Q3 update, Entain revealed BetMGM held an 18% market share in the US. That is level with Q2, and only marginally ahead of the 17% recorded in Q1.
