Govertsen bullish over USD45b gaming market

With Macau posting its ninth straight month of rising gaming receipts
– beating analysts’ expectations – a gaming analyst has agreed with recent statements made by Melco’s Lawrence Ho, who said that Asia’s gaming center would return to its peak in the next five years – just before the end of its concession contract.

Earlier this month, Ho expressed his prediction to Bloomberg TV that Macau would bounce back to the USD45 billion gaming market, stressing that the figures are solely in relation to gaming.

His projections recalled the region’s highest annual peak in 2013.

“Definitely within the next five years, it will grow back to the USD45 billion gaming market,” said Ho, who also serves as Chief Executive Officer to Melco. “And that’s just gaming alone, because the non-gaming part is significant,” Ho told the American-based satellite business news television channel.

Meanwhile, Union Gaming analyst Grant Govertsen suggested that the prospect is likely to happen based on the current gaming numbers.

The Macau-based analyst was speaking on the sidelines of a talk he delivered at the breakfast meeting of the British Business Association of Macau (BBAM) yesterday.

He clarified that achieving a USD45 billion gaming market is feasible if the VIP and mass market continues to grow at 6 percent and 8 percent respectively, or otherwise.

“The point is if Macau grows at roughly the same rate as China’s GDP, we’re going to be back at an USD45b market at the end of the concession period five years from now, and that’s a good thing,” he told the Times.

Meanwhile as mogul James Packer and Ho have bid farewell to a decade-long gaming partnership in Macau, the analyst hinted that there may not be immediate changes. However, there are at least “no longer two parties driving the ship, who might not be on the same page at all times.”

The analyst implied that, with the exit of Crown’s Packer, on a medium and long-term basis, it would be advantageous for Macau, as Melco would not have a competition of interest at the highest level of the company.

“They can purely focus – have one vision and one drive,” he added. 

Questioned about the factors leading to the continuous growth of the region’s gaming receipts, Govertsen is confident that the mass market has been the core of recovery.

The mass-market segment continues to grow 14 to 16 percent each year – while the VIP market for several months has finally become positive.

“I believe at least in the month of April, you probably have a dynamic where both the mass and VIP markets were experiencing around 15 to 16 percent growth,” he said.

“But I think the important thing to think about in the coming months is that mass market gross story has been in the double digits for months. That’s the key, the core of the recovery,” Govertsen explained.

The analyst further reiterated that mass market is the most profitable segment in Macau, alongside the government’s goal. He added that the VIP is just an extra bonus.

“We absolutely want to see the VIP continue to grow, but the mass market is the key to Macau’s future,” he concluded.

ATM facial scans have no impact over affluent gamblers

The MSAR government has required facial recognition and identification card checks at ATMs before Chinese UnionPay cardholders can withdraw cash in a bid to strengthen anti-money laundering rules. Yet Govertsen remarked that such restrictions are less likely to affect mainland gamblers. “We’ve seen several restrictions being put in place over the years, it didn’t seem to have had a material impact.” He added that most of the high-value players would not be affected by the ATM restriction, which does not seem to negatively impact the city’s gaming market.  The ATM rules follow a ban last year that prohibits proxy betting by telephone, aimed at staunching bets from gamblers in China.