Gaming | Worst is over for Macau, analysts say

The latest gaming revenues have signaled renewed optimism in Macau over the industry’s future growth, with many eagerly awaiting the March results that will be issued about 10 days from now.

February’s 17.8 percent year-on-year increase, which recorded a take of MOP23 billion (USD2.9 billion), marked the strongest growth in three years and indicated that the world’s biggest gaming market may have finally recovered from the adverse effects of Chinese President Xi Jinping’s anti-corruption campaign.

“I think the downturn is well and truly behind us now,” Andrew Scott, CEO of Macau-based Inside Asian Gaming magazine, told the AFP.

“It took us a couple of years to weather that storm – it was unexpected – but we’re through that.”

Scott said that continued growth in the territory would only be moderate in comparison to the unprecedented growth of the pre-2004 era.

The gaming revenue rebound has been partly propelled by a return of VIP visitors to the city, as well as gaming operators’ efforts to diversify and develop mass-
market attractions over the past few years. The extent that each component has been responsible for the recovery is still up for debate.

The gaming junket industry, which provides loans and other services to high-rollers in Macau’s casinos, has taken a beating in the past 36 months, with some analysts predicting it may never return to the heights of earlier years.

Many operators have already gone out of business and some have encountered scandals such as Dore Entertainment’s internal fraud fiasco in 2015. According to some reports, only 130 operators remain in the territory, down from about 230.

However, Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters of Macau, claimed last month that some junkets in the city had seen their fourth-quarter revenue for 2016 grow by one-fifth compared to the previous year.

Brokerage and investment firm CLSA told AFP that the VIP segment in Macau “is showing signs of life” and estimated growth of around 3 percent for this sector in 2017. However, the firm also predicted that the mass market would be the main driver of growth in the territory, and might expand by 14 percent this year. DB