No real product diversification on the horizon: analysts

Meaningful diversification of gaming products will be a long time coming due to the slow turning wheels of regulation, said at panel of analysts at the Macao Gaming Show on Thursday.

“Regulators generally are resistant to change. It's just very hard to introduce new concepts in gaming anywhere in the world beyond what we’ve already known,” said Grant Govertsen of Union Gaming.

“Whether it be sports betting, esports or skill-based gaming, there are customers that want it, and it’s coming, but regulators will get to it when they get to it.”

Vitaly Umansky of Bernstein Research when asked about whether sports betting will make its way to casinos, said it will be difficult as it was a local activity.

“Putting sports book in Macau, or trying to expand it, won’t do much for revenue diversification,” said Umansky.

However, he admitted it could bring more groups of people to Macau that may have otherwise not come.

Regarding the growth of electronic table games in Macau - Govertsen and Umansky said there were still hurdles ahead.

“One reason why ETG hasn’t taken off in Macau is largely because a lack of understanding, and because of the type of customer that comes to Macau,” said Umansky.

“Slot machines are about a grind type of customer... This type of player doesn’t come to Macau… Until we get a change in the types of people coming, that market will remain a small fraction of the total market.

When asked about the future outlook on the VIP market - Govertsen said he saw the outlook on VIP to be very positive.

“Junkets are flush with liquidity right now and it's only getting better. We might see 15-20 percent VIP growth in 2018,” he said.

“Beyond that, it’s a little tougher to predict, but you will likely see growth fluctuate,” he added. “However, near term, VIP will remain robust.”

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