Most Macau casino analysts appear to have abandoned expectations that there will be a second half recovery for the slumping casino business.
Bloomberg reports that they blame the slowdown on all the familiar reasons, plus a few that were not so visible at the beginning of the year.
Loser travel restrictions and signs of a possible easing of a proposed smoking ban have provided some optimism, but this has been offset by what Bloomberg describes as a yuan devaluation, a governmental clampdown on money flows and, most recently, alleged fraud by a junket operator.
The bottom line at the moment: Macau’s gross gaming revenue could fall to about $30 billion this year, $14 million less than the $44 million posted during 2014.
Nomura Holdings analyst Richard Hueng told Bloomberg, that recent events “give an additional reason to dislike the overall Macau gaming space because of the potential overhang. I’m not optimistic about the future of the VIP business.”
There are all the signs associated with a weak market. Sands China, which has the most rooms in Macau among six operators recently took out ads in Hong Kong newspapers offering rooms for as little as $102 until February.
While VIP revenue continues to slump in the face of a weak mainland economy and the relentless crackdown on corruption, the mass market has been showing signs of growth.
Bloomberg notes that one major test of the Macau economy could come during the weeklong China National Holiday Oct. 1-7. Major hotels appear to be fully booked.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: [email protected].