Analysts at brokerage Sanford C. Bernstein Ltd in Hong Kong say they think Macau government policy will prove to be constructive for the development of the mass gambling market.
“Now that the government has released its mid-term review report with emphasised intention to regulate the junket industry, we believe forthcoming government policies will be constructive (on a longer-term basis) and supportive as they relate to mass market and non-gaming development,” stated analysts Vitaly Umansky, Simon Zhang and Clifford Kurz in a note on Macau issued on Wednesday. It carried the qualifying subtitle ‘Now is not the time to give up’.
The brokerage has nonetheless reduced its growth estimate for 2016 casino gross gaming revenue (GGR) in Macau to a minus number, from its previous forecast of a modest 1 percent year-on-year rise.
The firm is now expecting a year-on-year decline in casino GGR of 3.5 percent.
Last year Macau generated casino GGR of MOP230.84 billion (US$28.9 billion) according to the city’s casino regulator, the Gaming Inspection and Coordination Bureau.
On the sidelines of a public event in Macau on Wednesday, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, said the government expected to record a fiscal surplus in 2016 and was maintaining its 2016 forecast for Macau casino GGR at MOP200 billion.
That would represent a 13.4 percent decline on 2015’s GGR. Investment analysts have noted however that Macau government annual estimates on GGR are typically cautious and tend to be below what is eventually generated by the industry.
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”While we recognise we have more work to do, we welcome ILGA’s indication today that Crown’s reform implementation is well-advanced towards suitability to operate gaming at Crown Sydney”
Executive chairman of Australian casino operator Crown Resorts