Sep 04, 2014 Newsdesk Latest News, Macau, Top of the deck  
Macau-based gaming operators MGM China Holdings Ltd and Sands China Ltd do not expect a rebound in casino VIP gross gaming revenue to take place for the remainder of this year, investment bank Nomura said in a note issued on Thursday.
The comments were attributed by the bank to representatives of the casino companies and reportedly made during investor meetings at Nomura’s ‘China Investor Forum 2014’, taking place in Shanghai on Wednesday and Thursday. The bank didn’t name the casino executives that gave the guidance.
Summarising the investor meetings, analysts Louise Cheung and Harry C. Curtis wrote MGM China and Sands China are “not expecting any meaningful VIP pick-up in 2014”.
VIP revenue in Macau has been declining in year-on-year terms for most of the year to date. Official data from Macau’s gaming regulator show VIP baccarat revenue dropped 5.8 percent in year-on-year terms in the three months ended June 30.
At the investor meetings, MGM China and Sands China described the recent VIP weakness as a demand issue, Ms Cheung and Mr Curtis stated. That, the two analysts explained, is related to high rollers from mainland China keeping a low profile in light of Beijing’s anti-corruption crackdown.
A note on Monday from Deutsche Bank AG’s Karen Tang also said there was now a “‘demand-side’ problem” linked to some high rollers being put off Macau casino visits by factors including a crackdown on corruption in mainland China.
But analyst Kenneth Fong of Credit Suisse AG in Hong Kong, on Tuesday said he thought the VIP problem was related primarily with the supply of transit visas for onward destination used by some mainland businesspeople to make a side trip to Macau.
He explained: “Based on our discussions with industry participants, the new transit visa restriction has had a more adverse impact than originally expected. This hurt the VIP and, to a certain extent, premium mass market revenue.”
Labour costs up 10 pct
MGM China has shifted 29 tables from VIP to the mass segment so far this year and sees more opportunities to shift the mix – potentially another 10 to 20 tables, its representatives at the Nomura investment forum said.
Sands China meanwhile told investors that its new premium mass area at casino resort Sands Cotai Central, called ‘Dragon Palace’, “could take longer than expected to ramp”, Ms Cheung and Mr Curtis wrote.
Sands China and MGM China gave guidance of the likelihood of approximately 10 percent year-on-year increases in labour costs for several years hence, in line with Nomura’s estimates. Labour issues – relating to shortage of supply, wage demands and subsequent higher costs – are putting pressure on Macau’s casino operators.
Both operating companies spoken to by Nomura added it could take up to three months for mass players to adapt to the upcoming full smoking ban on mass casino floors. But neither operator was expecting a material impact from the new restrictions, Nomura reported.
All mass-market gaming floors in Macau must go smoke-free starting from October 6, following that month’s Golden Week holiday, which includes the National Day celebrations of the People’s Republic of China on October 1.
However, casino operators will be allowed to build smoking lounges on their mass-market floors, but they must not have any gaming tables or slot machines inside them. In theory, they would be similar to smoking rooms found at major airports.
According to the new rules, casino operators can however ask to set up smoking areas with gaming tables and slot machines on non-main floor zones “that are of limited access to specific games and gamblers”. This is understood to cover not only VIP rooms but also premium mass gambling areas when they are isolated from main floors.
Jun 02, 2023
Jun 01, 2023
Jun 02, 2023
Jun 02, 2023
Jun 02, 2023
Genting Singapore Ltd says Lam Yi Young has resigned from his role as deputy chief executive of Resorts World at Sentosa Pte Ltd. The latter firm is an indirect wholly owned subsidiary of Genting...Jun 01, 2023
Alfastreet, a manufacturer of electronic gaming machines,...Jun 01, 2023
Casino equipment maker Sega Sammy Creation Inc is tweaking...Jun 01, 2023
The iGaming segment in Asia “has grown rapidly” since...May 31, 2023
Showing slot machine players – via animations on the...May 31, 2023
Macau stocks in likelihood “have been punished too much...May 31, 2023
There are foreign companies still interested in investing...May 31, 2023
Thailand could pass the necessary enabling legislation for...May 30, 2023
China will remain a key market for Asian gaming...May 30, 2023
Alejandro Tengco (pictured in a file photo), chairman and...May 30, 2023
There are “plenty of reasons” for the global gaming...May 30, 2023
Gaming equipment provider International Game Technology Plc...May 30, 2023
The Global Gaming Expo (G2E) Asia 2023 Special Edition:...May 29, 2023
Austria-based gaming equipment maker and operator Novomatic...May 25, 2023
Sports betting and online casino operating platform...May 24, 2023
The business performance in Asia of gaming content and...May 18, 2023
The organisers of Global Gaming Expo (G2E) Asia 2023...May 17, 2023
Gaming content and equipment supplier Light & Wonder...May 16, 2023
Casino equipment maker Sega Sammy Creation Inc is to...May 09, 2023
Casino slot machine and digital gaming content provider...May 05, 2023
The Global Gaming Expo (G2E) Asia event in Singapore is the...May 04, 2023
An adviser to a Thailand parliamentary committee mulling...(Click here for more)
US$8.1 billion
Macau’s casino gross gaming revenue in the five months to May 31