• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Beijing relaxed if Macau VIP grows at 15pct: Nomura

Jan 03, 2018 Newsdesk Latest News, Macau, Top of the deck  


Beijing relaxed if Macau VIP grows at 15pct: Nomura

Japanese brokerage Nomura thinks China’s central government would not be troubled if VIP gambling revenue in Macau grew by as much as 15 percent year-on-year during 2018.

But the institution said in a Tuesday report that its existing forecast of 13 percent aggregate growth in Macau’s 2018 casino gross gaming revenue (GGR) had been tempered by some “mixed” macroeconomic indicators generated from mainland China’s economy in the latter part of 2017. Most tourists to Macau hail from Greater China, and Chinese make up the bulk of Macau’s casino gamblers.

“We believe Beijing is agnostic about modest VIP/junket growth (approximately 15 percent) as long as stricter AML [anti-money laundering] and ‘know your customer’ regulations are followed,” stated Nomura.

Macau’s GGR for full-year 2017 expanded by 19 percent compared to the tally for 2016, according to data released on Monday by the city’s regulator, the Gaming Inspection and Coordination Bureau. The official growth rate of the VIP and mass segments for full-year 2017 will not be made public until later this month, when details of fourth-quarter GGR recorded by segment are due to be announced.

“We believe that recent concerns over liquidity in the VIP sector are overblown given the continued strength in the Chinese economy as well as the volatility typically seen in month-to-month measures such as total social financing,” said Nomura, referring latterly to an economic barometer established by China’s central government. It sums up total fundraising by Chinese non-state entities, including individuals and non-financial corporate organisations.

Nonetheless the brokerage stated: “Macroeconomic indicators in China, such as steel prices (which some view as a proxy for industrial spending trends) and total social financing growth, have… been mixed in recent months, which is why our outlook for 2018 GGR growth in Macau is positive (+13 percent) but not as strong as the nearly 20 percent growth in 2017.”

Potential barriers

Risks for the Macau market’s performance included “incremental government regulation in 2018” noted Nomura, citing Saturday’s announcement by China’s State Administration of Foreign Exchange that from January 1 mainland Chinese would be strictly limited to an annual CNY100,000- (US$15,366-) per person for cash withdrawals when using overseas automated teller machines (ATMs).

But the brokerage described Chinese gamblers as “remarkably resourceful when it comes to trying to move money out of the mainland”.

“Recall that in December 2016, news of daily ATM withdrawal limits sent Las Vegas Sands Corp, Melco [Resorts and Entertainment Ltd] and Wynn [Resorts Ltd] 11 percent to 14 percent lower in a single day but ultimately proved largely ineffective in crimping actual demand,” said Nomura.

Investment bank Morgan Stanley Asia Ltd suggested in a Tuesday memo that the updated rules for cash withdrawals at ATMs outside mainland China could affect “low end” premium mass customers. The institution noted that players in this segment – betting in significantly higher multiples than so-called grind mass gamblers, and doing so in cash rather than via the credit offered to VIP players – were some of the most prolific and profitable customers for Macau casinos.

“We believe premium mass contributed as much as 50 percent of total mass revenue or 25 percent of GGR in 2017,” wrote Morgan Stanley analysts Praveen Choudhary, Alex Poon and Jeremy An.

“Margins for this segment range from 25 percent to 40 percent among the operators, much higher than VIP and slightly lower than grind mass,” added Morgan Stanley, estimating the per person annual loss of premium mass customers at US$100,000 (CNY650,510) and noting that this figure was more than six times higher than the freshly-outlined annual ATM cash withdrawal limit for mainland Chinese.


  • tweet
Related articles
  • Macau op debt to hit US$25bln unless travel eased 2H: MS
    Macau op debt to hit US$25bln unless...

    May 24, 2022  

  • Macau ops share junket deposit liability: Macau top court
    Macau ops share junket deposit...

    May 16, 2022  

More news
  • Singapore visitor tally in year to April beats full-2021
    Singapore visitor tally in year to...

    May 25, 2022  

  • Leisure and Resorts 1Q loss widens as costs rise
    Leisure and Resorts 1Q loss widens as...

    May 25, 2022  


Latest News

Singapore visitor tally in year to April beats full-2021

Singapore visitor tally in year to April beats full-2021

May 25, 2022  

Visitor volume to Singapore grew by 472.2 percent year-on-year in the first four months of 2022, to 540,430, according to data issued by the city-state’s tourism board. The four-month figure is...
Read More
Leisure and Resorts 1Q loss widens as costs rise

Leisure and Resorts 1Q loss widens as costs rise

May 25, 2022  

Macau unemployment an instability factor to security: govt

Macau unemployment an instability factor to security: govt

May 24, 2022  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”If China’s travel easing gets delayed to the second half of 2023 [Macau operator’s aggregate net debt] could rise another US$2 billion, to US$27 billion by end-2023"

Praveen Choudhary, Gareth Leung and Thomas Allen

Analysts at Morgan Stanley banking group



Most Popular

  • Wynn Macau Ltd asks managers to take 10pct wage in stockWynn Macau Ltd asks managers to take 10pct wage in stock May 24, 2022
  • Macau GGR tax cut idea tied to China outlook: brokerageMacau GGR tax cut idea tied to China outlook: brokerage May 23, 2022
  • Macau op debt to hit US$25bln unless travel eased 2H: MSMacau op debt to hit US$25bln unless travel eased 2H: MS May 24, 2022
  • Review saw no irregularity in Levo Chan link: Macau LegendReview saw no irregularity in Levo Chan link: Macau Legend May 23, 2022
Copyright 2014-2022 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us