The year ahead - Ben Lee

Looking forward to 2017, the picture is less than clear. With the recent detention and arrests of Crown’s staff in China, all but one of the operators in Macau have ceased their direct marketing efforts across the border. Most if not all the foreign operators who have been targeting China have adopted the same risk minimization approach. What this means is that the direct VIP/Premium Mass players who have been relying on the casinos’ own staff to facilitate their logistics and assist with their funds transfers, will probably end up going back to the junkets. This is after all the raison d’etre for this unique Asian business model in the first place.

The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.

 China has previously warned Macau to keep its gaming industry under control, and if past comments were to serve as guide, we need to maintain a growth rate consistent with China’s own GDP growth forecast. Any increases higher than that would most likely elicit a response reminiscent of 2014.

A clearer picture of the future direction of the gaming industry will emerge once the new Director of the China Liaison Office in Macau has reviewed 2016 in its entirety, and given us his comments, and that will probably be some time in Q1. The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.

A single digit growth in line with China’s own economic growth will probably be our guide.

Note from Ben Lee, managing partner IGamiX Management & Consulting.

Other notes from: 

Andrew Klebanow, Global Market Advisors

Augustine Vinh, president and CEO of Stellar Management

David Green, CEO of Newpage Consulting

Ebbe Groes, CEO of EveryMatrix

Harmen Brenninkmeijer, managing partner at Dynamic Partners

Jay Sayta, founder of Glaws.com

Michael Zhu, vice president, operations, planning, analysis of Innovation Group

Mike Santangelo

Sam Sheng, director of Double Square Consulting

Steve Gallaway, Global Market Advisors

Sudhir Kale, CEO of GamePlan Consulting

Tim Shepherd, co-founder and president of business development at Silver Heritage Group

More news from this jurisdiction

Macau, Hong Kong, Mainland ChinaSunday, Feb 12, 2017

The bridge connecting Hong Kong, Zhuhai and Macau is expected to complete by the end of 2017, said Hong Kong’s Secretary for Transport and Housing.

Macau, Mainland ChinaThursday, Feb 09, 2017

Macau junket investor Iao Kun Group Holding Company says it will no longer look to expand its VIP gaming portfolio, instead focusing on investments outside the gaming sector.

Macau, Mainland ChinaTuesday, Jul 05, 2016

Non-gaming spending in Macau will continue to be threatened by Shanghai Disneyland, said Morgan Stanley in a note on Monday.

Mainland China, MacauWednesday, Jun 15, 2016

The opening of Shanghai Disneyland will have a minimum impact on Macau’s tourism market, says the president of Macau Travel Industry Council.

Macau, Mainland ChinaFriday, Mar 04, 2016

China’s 13th Five-year-Plan will be “good news” for Macau and Hong Kong, according to a spokesman for the Chinese People’s Political Consultative Conference, reports state news agency Xinhua.

Macau, Mainland ChinaThursday, Mar 03, 2016

Using casino junkets is one of the most costly ways of transferring money out of China, according to a report from Bernstein.

Macau, Mainland ChinaMonday, Aug 24, 2015

The VIP segment, which accounted for 60 percent of Macau’s gaming revenue in 2014, represented just around 100,000 to 120,000 players who on average lost $210,000 that year, data that seems to raise more questions than answers, according to a report by Bernstein Research.