Leong predicts steady gaming revenue in 2018

The Secretary for Economy and Finance, Lionel Leong, has predicted that gaming revenue is likely to increase at a steady pace this year, similar to what was recorded in 2017.

According to a government statement, “in any year, the city’s gaming revenues could easily be affected by a number of external factors, including the respective economies in Macau’s visitor source markets; the global economy; and competition from gaming industries in other areas.”

Leong cautioned that it is not an easy task to project the future performance of the gaming sector, which has experienced fluctuations in revenue over the years.

However, given predictions for sustainable growth in Macau’s visitor source markets this year and a lack of significant changes to the global economy on the horizon, the Secretary believes 2018 gaming revenue should build on last year’s strength.

The government reiterated its intentions to redouble efforts on two fronts; first, to “enhance the overall competitiveness” of Macau’s gaming sector, vis-à-vis emerging rival jurisdictions in the Asia-Pacific region, and second, “to cope with challenges arising regionally and internationally.”

Macau gaming revenues climbed 19.1 percent last year to reach over MOP265 billion (USD32.78 billion), the highest posting since 2014.

Analysts broadly credited the VIP segment as the driving force behind the recovery’s strength, after data showed the segment expanded approximately 26 percent in 2017.

Many analysts expect the VIP segment to wane – in relative terms – in the next few years, pointing to the increasing relevance of the mass and premium mass segments on the back of a ‘family-friendly’ rebranding of Macau and the ongoing effects of President Xi Jinping’s anti-corruption campaign, which continues to deter high-rollers from visiting the MSAR.

Whether these factors will prove to have a dampening effect on the VIP segment remains to be seen. Brokerage firm Sanford C Bernstein predicts an 8 percent expansion in the segment, while Morgan Stanley said it expects about 20 percent.

Separately, Leong confirmed that the Gaming Inspection and Coordination Bureau has received an application for MGM Cotai regarding new-to-market live-dealer gaming tables. The government will announce the results in due course.

MGM Cotai is expected to open on January 29. DB