‘Party’s not over’ says Packer

The downturn in the once-booming gambling hub has been far sharper than anticipated, says billionaire James Packer, but he insists “the party is not over yet.”
“The slowdown in Macau is more severe than any of the operators foresaw,” Packer, chairman of Crown Resorts, one of Australia’s biggest gaming and entertainment groups, told CNBC yesterday.
“I don’t think anyone, 18 months ago, would have predicted what’s happened now,” he said.
China’s anti-graft campaign and economic slowdown have hit the industry hard, with gaming revenues declining for an eleventh straight month in April – down 38.8 percent year-on-year to MOP19.167 billion (USD2.40 billion).
And this month doesn’t look pretty either. Barclays Research cited its gaming industry sources indicating that Macau’s average daily table revenues were HKD533 million for the period 11-17 May.
The research house said this data softened from the prior reporting period (1-10 May, which included the Labor Day weekend) that saw HKD681m per day table revenue, and is weaker than the April average daily table revenue of HKD590m.
Based on the current run-rate, Barclays expects May gross gaming revenue to see decline of 37-39% year-on-year (slightly lower than its previous expectations of -36% y-o-y).
For the Macau gaming market as a whole, it still expects 26% gaming revenue decline this year followed by just 2% growth in 2016.
Packer believes “ the long-term macro picture for Macau is still incredibly exciting,” given it is the only place in China where casinos are legal.
Melco Crown Entertainment, a joint venture between Packer and Lawrence Ho, operates two gaming resorts in the enclave and it’s about to open a new property this year.
“I think we’ve all got to be mindful of the fact that it’s been a terrific ride so far, and nothing is a straight line up,” Packer said to CNBC.  PC