Sands China Will Keep Macau GGR Lead Thanks To Londoner Resort
Sands China Ltd has a good lead over its competitors when it comes to overall gross gaming revenue (GGR) in Macau. Analysts from Sanford C. Bernstein Ltd peg Sands China’s lead at 27 percent over the rest of the competition. One of the main reasons for this lead is thanks to Londoner Macao resort.
The Londoner is a recent remodelling of the Sands Cotai Central resort, and the fact that it has set up luxury accommodations at the Grand Suites at Four Seasons.
Analysts at Bernstein are weighing in and predict a strong lead for Sands China. By 2023, they think that the firm will get a 103 percent increase from its 2019 revenue while 2025 will be even better as they predict a 124 percent increase when compared to the revenue in 2019. This is mostly because of the optimism they share about the recovery of Macau’s gaming market and the fact that Sands China should dominate the market.
Another reason for their optimism is because Sands China is also working the non-gaming market, which is primarily tourism. However, there is still a bit of a concern about China getting tougher on its gambling crackdown. That would put a dent in Sands China’s plans, but it will also affect the remaining five gaming operators in Macau.
One of the main concerns is that Sands China could become a victim of strain between US-China relations. Bernstein’s analysts did point out that the Macau peninsula was too small to be a victim in the political fight between the two countries. The idea that Macau might become a battleground in the geopolitical match between China and the US was dismissed as something that has no merit by experts.
However, tougher restrictions are being proposed for Macau’s gaming market that might cause Sands China some trouble. Most notably is the proposal that foreign operators might be forced to give up ownership to local operators, along with suggestions of stopping dividend release and forcing equity stakes. The tougher restrictions will cause problems for all six gaming operators.
There is also the fact that the current Macau license for Sands China is set to expire by June 2022. In the recent third-quarter earnings call for Las Vegas Sands, CEO Robert Goldstein remained optimistic and said they would continue to have operations in Macau going forward.