Fitch Ratings forecasts the global gaming outlook for 2024 as “neutral,” citing a decline in certain U.S. markets and possible stagnation in Europe.

A new report from Fitch Ratings forecasts the global gaming outlook for 2024 as “neutral.”

It is the second year in a row that Fitch has chosen a “neutral” rating for its gaming outlook. Fitch cited the “slight decline” in “pent-up demand” in the USA as one reason for the rating.

In general, the US is still doing well after a “robust” 2022. However, Fitch’s December 6 report details that regional gambling is showing signs of stagnation.

In Asia Pacific, demand is thriving thanks to the return of the mass market following the Covid-19 pandemic. Meanwhile, Singapore continues to “perform above expectations”.

Limited regulation in the Middle East and Africa (part of the EMEA region) is proving beneficial alongside rising online profitability in the US. In Europe, the review of the UK gambling law is expected to be “implemented in the medium term”. Overall, ongoing regulatory concerns for EMEA companies focused on the UK are expected to ease next year.

The “increasing profitability” of the US online sports betting market is also likely to have a positive impact on those who have access to it.

Fitch Outlook: Macau is a growth area

Fitch expects Macau to be a big story in 2024 as “visitor numbers continue to increase.” This is despite the problems with the Chinese economy.

Gambling revenue in Macau reached MOP$16.04 billion (£1.56 billion/€1.83 billion/US$2.00 billion) in November, the fourth-highest monthly total so far in 2023.

The year-on-year increase is due to the lifting of Covid-19 restrictions.

Melco Resorts & Entertainment, one of Macau’s leading casino operators, reported a significant increase in revenue thanks to the easing of restrictions in the region.

In the third quarter, revenue rose 320.6% to $1.02 billion. Casino was the catalyst for this growth, with revenue increasing 346.2% to $812.1 million.

Las Vegas faces potential problems

Fitch predicts that the slowdown in “pent-up demand” will become an issue in Las Vegas and that there will be a possible decline in 2024, despite numerous sales records being broken this year. The customer mix, which may shift towards “more non-gaming customers,” is also expected to prove a stumbling block.

BetMGM, a leading operator in Las Vegas, recently announced that it expects to generate positive EBITDA of $500.0 million (£396.1 million/€462.2 million) by 2026 and at the same time achieving a market share of 25% in the USA.

BetMGM has set the 2026 target after revealing that the company expects to be at the high end of its 2023 guidance. CEO Adam Greenblatt says sales are expected to be between $1.80 billion and $2.00 billion in the current fiscal year.

While Greenblatt was optimistic about BetMGM’s Q3 results, Goldman Sachs highlighted the stagnation the operator is currently experiencing.

In its Q3 update, Entain revealed that BetMGM has an 18% market share in the US. This corresponds to the level of the second quarter and is only slightly higher than the 17% in the first quarter.