Inside Asian Gaming

INSIDE ASIAN GAMING SEPTEMBER 2018 20 COVER STORY money changers didn’t have material impact, analysts say, though the measures may have sent the intended signal. “The real threat to sustained or future slowdowns still remains the PRC government,” Macomber International President Dean Macomber, whose global gaming résumé includes executive stints in Macau and the Philippines, observes. “Everything else is, so far, just noise as long as the [Beijing and Macau] governments want Macau casino gaming to succeed.” DOWNSIDE UPSIDE “Slowing VIP may well be a ‘blessing in disguise’ for long-term investors, as too much growth in VIP could attract unwanted regulatory attention/reaction, sooner or later,” JP Morgan Head of Regional Gaming and Lodging Research DS Kim and Research Analyst Sean Zhuang write in a client note. Through July, GGR is up 17.5% for the year. Union Gaming’s Govertsen sees full-year growth slowing to 16% with Q3 growth at 12.9% and Q4 at 12%. Bernstein expects this year’s growth will fall to 14%, with 4% growth next year and 12% in 2020, assuming no major disruptions in the mainland China economy and new projects opening as projected. What will drive future growth is simple, Michael Zhu says, “Mass, mass, mass. The Chinese provinces other than Guangdong generally have low gaming penetration and are still underserved by Macau-type Mainland-inspired removal of UnionPay terminals from casino jewelry shops in June and a temporary shutdown of Gongbei border money changers didn’t have material impact, analysts say, though the measures may have sent the intended signal. IRs. The gaming facilities in the surrounding areas, such as Korea, far-eastern Russia and Vietnam, are not comparable to Macau, either in scale or in quality of facility and service, and thus would not be able to provide a similar level of experience, especially for mass players and visitors. Macau still remains one of the top destinations for a large portion of Chinese outbound tourists, especially the first- Continued ramp at Morpheus at City of Dreams will help drive upside for Macau in the coming months.