Macau Casinos Hub Has Limiting Factors?

Posted: July 5, 2012 in Uncategorized

Latest Asian casino news extracts

Macau casino stocks declined in Hong Kong trading amid speculation visa restrictions and limits on some China credit cards are slowing revenue growth in the world’s largest gambling hub.

Galaxy Entertainment Group Ltd. (27) dropped 5.7 percent to close at HK$18.12, Sands China Ltd. (1928) declined 5.8 percent, Wynn Macau Ltd. lost 2.8 percent.

Growth in mainland Chinese visitors to Macau may have softened in May as the Guangdong local government might be tightening visa issuance and as China UnionPay reduces the amount that can be spent overseas on credit cards, Chinese- language Macau Daily reported on June 23. Macau casino gambling revenue rose 7.3 percent in May, the slowest pace since July 2009.

“Recent weakness in Macau gaming revenue and visitation growth could be partially explained by the visa restrictions and reduction in China UnionPay limits highlighted by the Macau Daily,” Cameron McKnight, an analyst at Wells Fargo & Co., said in a June 25 research note. “While expectations have recently moderated, we believe outperformance in the Macau stocks is likely to be limited here.”
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Commentary:

Last year Macau gaming revenue was up by 42%! Looking at the current limiting factors, growth of gaming revenue in 2012 will likely be capped within 30% or much less.

The landscape of Macau will not change very much as the Cotai development has entered stagnated phase yet very lacking of true innovation.
Next two years the casinos will have to hold on their turf and survive on even lower margins. Every catch is important.

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