Macau VIP Gambling Growth Slows Down Further

Macau, one of the two special administrative territories where legal gambling in China is available witnessed a rather weak growth in the VIP market in the last few months. The city state therefore cut its estimates for its casino industry.

Deutsche Bank analysts drastically reduced their estimates for growth to 7 percent from the previous 11 percent. Their report also mentioned that the disappointing VIP growth is likely to worsen in the next fiscal quarter in 2012.

Even worse news, Deutsche Bank growth estimates for the VIP gross gaming revenue in 2013 is 0 percent, 5 percent down from the original forecast. Analysts have also downgraded all Macau casino gambling operators from buy to hold buy, with the exception of Melco Crown Entertainment and Galaxy Entertainment Group.

It seems that the ex Portuguese colony is putting more emphasis on recreation. According to the Macau gambling authorities, future gaming developments will have to display more non-gaming activities in order to be granted a more live gaming tables.

Francis Tam Pak Yuen, Secretary for Economy and Finance in Macau, informed that number of tables granted for new Cotai properties will depend on the non-gaming elements offered by the establishment.

Tam noted: “We decide the number of gaming tables according to the non-gaming components and the overall development plan. When the operators are making their proposals they would want to have, for example, 500 gaming tables. But that’s just a number written down in their proposals.”

Trouble rarely comes alone. A few weeks ago, Macau horse racing, an important factor in Chinese sports betting, reported a decrease in total revenues and profits.