Credit Suisse Group AG, a Switzerland-based provider of a wide range of financial services, released a special note on the current status of Macau’s gaming industry. According to it, the administrative region could not manage to improve its average daily gaming revenue even after Chinese President Xi Jinping’s two-day visit to the world’s most popular gambling hub.
The analysis of the financial institution came after local government published a report on the city’s gaming industry full-year financial performance. As previously announced, Macau marked a 30.4% drop in December gaming revenue as compared to the numbers posted last year.
Credit Suisse paid special attention to the probable split of gambling market between turnover from VIP players and turnover from mass players. It seems that mass market generated better profit margins than the VIP one, despite the fact that volume was lower.
Credit Suisse forecasted that VIP revenue would drop by 37% to 40% in December and mass revenue would fall between 13% and 19% year-on-year. According to Isis Wong, an associate at the financial institution, and Kenneth Fong, a credit specialist, this sharp decrease in turnover from mass players will definitely affect gaming market in quite a negative manner.
It was announced that later in January, local government will release information about the split between VIP and mass revenue for the three-month period ended December 31.
Experts from Credit Suisse pointed out that the stricter transit visa regulations and President Xi’s call for more thorough monitoring of the city’s gambling industry will continue to hamper “the revenue recovery”.
Back in December 2014, local media reported that from January 1, all junket operators in Macau would be required by the Gaming Inspection and Coordination Bureau to submit special documents that would prove their lack of criminal record.
Decrease in city’s gaming revenue was first posted in June 2014 and it was due to drop in profits from VIP players. At that time, mass market was doing really well.
Karen Tang, an expert from Deutsche Bank, released a note in late September, containing information that mass market had also began to generate lower revenues. And it seems that this downtrend continued in the fourth quarter of 2014, as well.
On Friday, January 2, Macau-based gaming analysts Grant Govertsen and Felicity Chiang, both working for Union Gaming Research Macau Ltd., released a note in which they stated that they expect Macau’s gaming revenue for this year’s first quarter to drop by at least 20%. According to them, there will be no “material change” in both mass market and VIP market trends.
