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, Mainland ChinaWednesday, Jul 26, 2017

Increased anti-corruption activity in China over 17Q2 may pose a risk to premium spend, says Bernstein analysts.

Macau, Mainland ChinaTuesday, May 09, 2017

Chinese top official Zhang Dejiang has pledged to better facilitate the flow of people between Macau and the mainland by streamlining measures in Macau’s visa process.

Mainland China, MacauMonday, May 01, 2017

Zhang Dejiang will make a two-day visit to Macau early this month and is expected to make a major announcement during the trip, the South China Morning Post reported.

Macau, Mainland ChinaFriday, Mar 31, 2017

Success Universe says it’s optimistic about the long-term future for the Macau gaming industry, with the expansion in the mass sector pointing to more sustainable future growth.

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.