Economy | UM forecasts 13.6pct contraction in 2016

The University of Macau’s (UM) Department of Economics has forecast that Macau’s economy will contract by 13.6 percent this year, led by the continued slump in the gaming industry.
According to the financial media outlet Benzinga, UM economics professor Fung Kwan estimates that gross gaming revenue totals will come in at 15 to 20 percent lower than 2015.
As the Times reported yesterday, gaming revenue fell by 21.4 percent in January, compared with the same period last year. This month is expected to continue the trend of an uninterrupted decline in revenues, despite the arrival of the Chinese New Year – traditionally the busiest period for Macau’s gaming operators.
It is not clear how Kwan regards the speculation over a possible recovery for Macau’s gaming industry this year, as the Times did not receive a reply by the time of publication. However, his estimates indicate a gloomy start to the year at best.
On the other hand, Vitaly Umansky, an analyst at A.B. Bernstein, wrote that long-­term Macau investors will eventually be rewarded for their patience.
“While the Macau gaming industry will remain volatile over the near-term, we view the industry as a secular growth story driven by the paradigm shift from VIP to Mass [market],” Umansky explained, according to Yahoo Finance.

nevada gaming growth led by vegas strip

Things are looking up for casinos in the state of Nevada in contrast to Macau’s revenue woes. Gaming “win” (revenues) in the state reached USD982.1 million in December 2015, with the large majority (USD600.8 million) coming from resorts along the Las Vegas Strip, PokerNews reported. The Nevada Gaming Control Board revealed that December revenues in the state marked a 3.3 percent increase over the same month in 2014, while those on the Las Vegas Strip recorded 8.2 percent year-on-year growth in December.