Recent softness in VIP gambling revenue in Macau could be linked with an upswing in baccarat play by Chinese gamblers in Las Vegas, suggests a note from Union Gaming Research LLC in the United States. The latter could be connected to political issues within mainland China, adds the research house.
The Nevada Gaming Control Board recently reported June 2014 gaming revenues for Clark County including the Las Vegas Strip (pictured). The results showed that baccarat win (amount staked less prizes paid) up 155 percent year-on-year, to approximately US$134.2 million.
“We have now seen three straight months of strong baccarat play,” says the note from analyst Robert Shore at Union Gaming.
“We think there is a correlation between recent strength in Las Vegas high-end play and the weakness in Macau VIP play. Recent commentary and channels checks indicate Las Vegas Strip properties are seeing an increase in Chinese visitors. This meshes with our thesis that the primary driver of VIP softness in Macau is politics, not the economy,” adds Mr Shore.
Japanese brokerage Nomura in early June warned it expected the 2014 FIFA World Cup soccer tournament would act as a damper on VIP gambling demand in Macau.
June did see a 20 percent decline year-on-year in VIP revenues, according to analysts. But if the softness in the high roller segment continues into July – the tournament ended on July 13 – then analysts will look to other factors.
Credit-Suisse Group AG said in a note issued in Hong Kong on July 21, that total Macau gaming revenues for July were tracking for a 3 percent to 5 percent year-on-year decline judged by average daily run rates for the first 20 days of the month.
In the three months to June 30 in Macau, VIP’s contribution to the gaming gross slipped to only 60 percent according to data from the city’s Gaming Inspection and Coordination Bureau. The fall has coincided with a widely reported crackdown on corruption in mainland China. The crackdown actually began in the autumn of 2012 but appears to have intensified recently. It is said by mainland China media to include greater scrutiny of spending by senior public officials and senior managers of state enterprises.
The number of Chinese tourists to the U.S. as a whole rose 23 percent to 1.81 million in 2013, according to data from the U.S. National Travel and Tourism Office.
Union Gaming stated in its note on the Las Vegas Strip’s June numbers for baccarat: “Drop was up 57.4 percent on 12.4 percent hold (150 basis points lower than the LTM [last 12 months] average), but 470 bps higher than the prior year.”
It added: “As a frame of reference, looking at recent average monthly volumes, a 100 bps swing in hold can account for roughly US$10 million in win/loss in either direction. We have now seen three consecutive months of robust baccarat volume growth (April +19.7 percent, May +26.4 percent & June +57.4 percent).”
Jan 19, 2021Bank automated teller machines (ATMs) with facial recognition technology have been installed since Monday in some places in the mainland China city of Zhuhai, next door to Macau, according to several...
Jan 19, 2021
Jan 19, 2021
"The increased focus we can now bring to our gaming and amusement business [after a spin-off of the firm's cash-handling product business] will bring us closer to the customer as we align our offerings more directly with their needs"
Global president of casino equipment supplier SuzoHapp