Fitch Ratings Inc says Macau’s gaming market “remains strong”, despite recent noise around junket liquidity and a potential crackdown on unregistered mobile UnionPay card processors.
“The market is on pace to grow 17.5 percent this year through April, well ahead of our 12 percent forecast for gross revenue growth,” Fitch says in a new report issued today.
The impact of a government crackdown on unregistered mobile UnionPay card processors will be “limited”, the ratings agency assumes, given “the frequency of similar news flashes that are followed by relatively uninterrupted continuation in prior trends”.
There have also been renewed concerns over junket liquidity after a junket agent reportedly went missing owing US$1.3 billion to investors. But Fitch notes that Macau gaming operators have downplayed junket-related concerns on recent earning calls.
The rating agency says casino operators are instead increasing their focus on mass play. “All seem to be repositioning tables from VIP to the mass floor.”
On their first quarter calls, U.S.-based Las Vegas Sands Corp and MGM Resorts International said that around 70 percent of their Macau cash flows were attributable to mass, Fitch notes. Las Vegas Sands is the parent company of Macau-based operator Sands China Ltd and MGM Resorts International controls MGM China Holdings Ltd.
Melco Crown Entertainment Ltd attributes 75 percent of cash flows to mass.
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"I believe that when Macau makes a decision, there is going to be a requirement to invest more"
Chairman and chief executive of Las Vegas Sands