Morgan Stanley sees 16% GGR growth through 2026

Morgan Stanley described the outlook for the gaming industry as positive in a recent memo, noting that monthly gross gaming revenue (GGR) continues to grow at over 10% year over year. The private bank forecasts GGR to rise by 16% through April 2026. Morgan Stanley analysts highlight a gap between consensus earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates and GGR growth expectations. While consensus EBITDA is projected to grow by 9% year over year in the fourth quarter, this falls significantly short of the 16% GGR growth forecast, even without assuming margin expansion. The bank suggests this gap “could mean upside to current EBITDA expectations.” Regarding operators in the city, Morgan Stanley expressed confidence in Galaxy Entertainment Group (GEG) ahead of the fourth quarter, pointing to market share gains as a major factor. The bank expects Galaxy’s EBITDA to improve in the fourth quarter, helped by lower operating expenses following one-time marketing costs in the third quarter related to Capella’s pre-opening. The bank also highlighted MGM China’s strong position. MGM reported a 100-basis-point increase in its GGR market share in October compared with the third quarter. Analysts also noted MGM’s year-over-year growth of more than 10% in its high-end customer segment, supported by the recent launch of the Alpha Gaming Club. These comments follow Citigroup’s sector memo, which observed a roughly 6% moderation in GGR during the second week of November compared with the first nine days of the month, when the daily run rate was about MOP711 million. Citi attributed this slight dip to hotel rooms being occupied by athletes participating in the National Games, which temporarily reduced the average length of player stays and playtime. The 15th National Games will continue until tomorrow.