Chinese Regulations Predicted To Slow Down Macau VIP Gambling In 2018
Macau’s casino industry finally reported an increase in its gross gaming revenue (GGR) in 2017 after a three-year consecutive decline. While hopes are up for this growth to spill over into 2018, gaming analysts are saying that the VIP market will slow down significantly in the second half of 2018.
In a note released by brokerage firm Sanford C. Bernstein Ltd, market analysts Vitaly Umansky, Zhen Gong and Cathy Huang said that political and economic factors that will affect mainland China will also likely impact Macau and its casino industry. Since most Macau’s VIP gamblers come from the mainland, there is much instability to be expected.
According to data released by Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, Macau’s casinos saw a 19.1 percent increase in its GGR for 2017 at an accumulated 12-month revenue of MOP265.74 billion (US$33.02 billion).
A major chunk of the increased revenue came from the VIP gambling segment. Because of this, the Bernstein analysts have come up with a conservative growth prediction for Macau, taking into consideration the influx of VIP gamblers that will come from the mainland.
In a statement, the Bernstein analysts said
Although it is likely to continue to show strength over the next few months (or even the next two quarters in 2018), the VIP model is likely to face structural headwinds in the latter part of 2018 from instituted cooling measures on Chinese real estate, a credit tightening in China, an increasing [focus on] regulatory environment in Macau and continued Chinese government focus on capital outflows in China
Before 2017 came to a close, the Communist Party of China (CPC) Central Committee led by President Xi Jinping issued a statement announcing that they are tightening their anti-graft campaign in 2018. Coincidentally, VIP GGR started to become sluggish in mid-December according to a report from Credit Suisse AG.
Despite the slowing down of the VIP segment, the report still predicted VIP GGR to grow 8 percent and will contribute to the total 2018 GGR which is pegged at 10 percent year-on-year. A huge chunk of the overall growth will come mainly from the mass gaming segment poised to grow 11 percent year-on- year.
Macau’s gaming industry will receive another boost in 2018 as MGM Resorts is expected to open their $3 billion MGM Cotai casino after delays in 2016.
THEMGMMACAU
Paul ButcherAuthor
Hi, I am the Chief Editor of top10casinowebsites.net, this site is dedicated to all thing casino. I have been working around the casino industry for the last 12 years, with different brands. The main purpose of this site is to keep you informed with the latest news and offers around
