GGRAsia – Macau doubts build on govt’s pledged review: Wells Fargo

Macau doubts build on govt’s pledged review: Wells Fargo

Jan 07, 2015 Newsdesk Latest News, Macau, Top of the deck

An upcoming spring review of the casino industry by the Macau government “creates added uncertainty” in the Macau market said a note on Tuesday from Wells Fargo Securities LLC.

The institution on Tuesday cut its estimates on Macau’s total 2015 gaming revenue from 4 percent decline year-on-year to a 15 percent decline from 2014, citing concerns over continuing restrictions on use of transit visas by Chinese visitors, stricter currency regulations, and the mainland’s anti-corruption campaign.

On Monday, Karen Tang of Deutsche Bank AG in Hong Kong cut her 2015 growth forecast for Macau gross gaming revenue (GGR) from 0 percent to a decline of 8 percent year-on-year, citing tougher rules on junkets and transit visas as likely to continue to “hurt” VIP and mass-market gambling in the first half of 2015.

Cameron McKnight of Wells Fargo and his colleagues Rich Cummings and Tiffany Lee said in their Tuesday note: “We are not being bearish for the sake of it, but currently don’t see a reason to expect revenue improvement given China’s policy actions towards Macau.”

On January 2, Macau’s Gaming Inspection and Coordination Bureau announced a 2.6 percent decline year-on-year in the city’s casino GGR during 2014, following a 30 percent decline year-on-year in December.

On December 19, Macau’s Chief Executive, Fernando Chui Sai On said his government would in the spring “undertake a review” of the city’s casino industry. No detail on what form the review might take was given in local media reports.

It followed remarks made on a visit to the city by China’s President Xi Jinping. He called for Macau to show “greater courage and wisdom” to “strengthen and improve regulation and supervision over the gaming industry”.