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