Resur­gence in Ma­cao’s casino rev­enue growth may oc­cur with the open­ing, in rapid suc­ces­sion, of eight mega projects, start­ing in the mid­dle of 2015. The long-held the­sis that growth is con­strained by the sup­ply of ho­tel rooms will again be put to the test

China Daily (Canada) - - FRONT PAGE -

Ma­cau Gam­ing In­dex, a barom­e­ter of the sec­tor pub­lished by Bloomberg In­tel­li­gence (BI), fell from the one-year high of 772.78 last March to a low of 387 on Jan 21.

The de­cel­er­at­ing econ­omy on the Chi­nese main­land is not fa­vor­able for the gam­ing in­dus­try and the po­lit­i­cal at­mos­phere, amid a crack­down on cor­rup­tion, is also hav­ing a choke ef­fect, es­pe­cially for high rollers, said a Bar­clays re­port pub­lished in Jan­uary.

Main­land gross do­mes­tic prod­uct (GDP) grew only 7.4 per­cent in 2014, and the World Bank es­ti­mates GDP growth this year to fur­ther slide to 7.1 per­cent. Given the his­tor­i­cal cor­re­la­tion be­tween Ma­cao GGR and key main­land macro in­di­ca­tors, the con­tin­ued weak­ness in the main­land macro econ­omy will lead to less chance of strong re­cov­ery in player sen­ti­ment, the bank said.

The anti-cor­rup­tion cam­paign, tar­get­ing ex­trav­a­gant life­styles of bu­reau­crats, has been in place for more than 18 months, since be­ing an­nounced in mid-2013. The en­vi­ron­ment could con­tinue to cause cer­tain VIP play­ers, and some pre­mium mass-mar­ket play­ers, to be more cau­tious about go­ing to Ma­cao, the bank pointed out.

“We be­lieve th­ese sen­si­tive play­ers might only come back if the anti-cor­rup­tion drive eases. For now, how­ever, there is no clear sign when the cam­paign will wind down.”

Separately, the mass mar­ket has also been hit by the chang­ing of rules. Last July, a new re­stric­tion cut the max­i­mum stay for main­land vis­i­tors on a tran­sit visa from a week to five days. And for those not go­ing to re­ally tran­sit to an­other des­ti­na­tion, only a sin­gle day of stay would be granted upon a sec­ond en­try within two months, and en­try de­nied out­right the third time.

The rules af­fect fre­quent vis­i­tors who are av­er­age play­ers, and the num­ber of ar­rivals ex­clud­ing group tour vis­i­tors is de­clin­ing.

What’s more, a smok­ing ban on mass-mar­ket floors was im­ple­mented on Oct 6. Fol­low­ing that, mass-ta­ble rev­enues turned to neg­a­tive growth in Oc­to­ber for the first time in five years and de­clined for three months in a row. “The smok­ing ban neg­a­tively im­pacts play­ers’ length of play and size of bet,” the Bar­clays re­port said.

How­ever, the pain will likely not ease in the short term. At the end of De­cem­ber, as the for­mer Por­tuguese colony cel­e­brated its 15th an­niver­sary of han­dover, Pres­i­dent Xi Jin­ping called on the gov­ern­ment of the SAR to show “greater courage and wis­dom” to “strengthen and im­prove reg­u­la­tion and su­per­vi­sion of the gam­ing in­dus­try”.

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