Macau gaming stocks are in for a "watershed" year, with casino operators in the Chinese enclave set to enjoy solid demand growth without a significant increase in new supply, according to Citi.
"2014 is the first year since 2005 with no major casino opening to drain growth and will be a year with excess demand given the largest hotel property on the mainland is opening up across the border in Hengqin," analysts at Citi wrote in a report this week.
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"The lack of a significant opening until mid-2015 provides an 18-month runway," they added.
This is in stark contrast with what happened over the last three years, the analysts noted, when Galaxy Macau and Sands Cotai Central - the two newest properties in Macau - took a significant portion of the overall gaming revenue growth in the city.
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The bank forecasts gross gaming revenue - the amount wagered minus the winnings returned to players – will total $54 billion in 2014 – a near 20 percent rise from the previous year.
Last year, Macau casinos collected $45.2 billion in gaming revenues – around seven times the amount earned on the Las Vegas Strip.
One major catalyst for growth is an increase in visitors driven by the long-awaited opening of the Chimelong International Ocean Resort – the largest hotel in mainland China featuring a theme park and man-made beach – on Hengqin, an island that is a 10-minute drive from Macau.
The theme park, which is expected to open its doors by the end of January, is forecast to receive over 20 million visitors a year, the bank said.
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"If we conservatively assume that only one out of five people who visit Chimelong will also cross the border and visit Macau, we could see an incremental 4 million mainland visitors to Macau," it said.
Stocks to bet on
Hong Kong-listed Melco Crown, Galaxy Entertainment and Sands China are Citi's top stock picks in Macau's gaming space.
The bank forecasts 37 percent, 29 percent and 26 percent upside for the stocks, respectively, over the next 12 months.
"[Melco Crown's] Studio City is the best-located casino in Cotai, situated adjacent to the Lotus Bridge border with the best access to Hengqin among its Cotai peers," the bank said. Cotai is an area of Macau that is modeled on the Las Vegas Strip.
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Galaxy Entertainment will be the next operator to open a new casino in the city – the second phase of Galaxy Macau in 2015, which should be a positive catalyst in the medium term, it said.
Meanwhile, Sands China will be the group to benefit most from the growth in mass gaming revenue growth in Macau, it added.
—By CNBC's Ansuya Harjani. Follow her on Twitter: @Ansuya_H