Analysis | Downturn may mean ‘the old Macau is dead’

Macau’s gaming industry downturn might mean that “the old Macau is dead,” according to a Business Insider analysis. It argued that when the adjustment period is over, “the industry will likely be very, very different.”
In an article titled “Wall Street’s Macau delusion has really gone far enough,” the business-oriented news site refuted Wall Street analysts’ optimism on the old operations of Macau’s gaming industry.
“The old Macau still lives on to Wall Street analysts,” the article said, citing an opinion of investment bank JP Morgan that a stock market recovery will eventuate at around the end of April. It disproved JP Morgan’s view that the current downturn is “cyclical in nature,” and that “the sector can resume its healthy growth once it finds the bottom.”
According to JP Morgan, market expectations will be rationalized and new openings should, to a degree, catalyze a recovery in demand. JP Morgan also argues that as “most policy pressures started from mid-2014, gamblers may get used to ‘new norms’ by mid-2015 and revisit Macau.”
In response, Business Insider Senior Finance Editor Linette Lopez also presented a set of economic indicators that “show signs of weakness,” including a chart detailing the trends in high-roller spending.
“[Chinese President] Xi [Jinping] doesn’t care if the island’s economy suffers, as long as he gets the cleaner, less corrupt China he’s been working for. That’s what his anticorruption drive is about. That’s why there are more cameras in casinos to scare high rollers. That’s why even the once untouchable nephew of Macau scion Stanley Ho was arrested along with 99 prostitutes in a sting at Ho’s Casino Lisboa,” the author stressed. “It’s because the old Macau is dead.”
“(…) Based on the government’s desire to turn Macau into a more family-friendly destination, one can expect that new projects will have fewer [gambling] tables than old ones.”