Scholar says casino revenue to grow just 10 pct this year
Forecasts for growth in Macau’s gaming gross revenue this year have been trimmed to as low as 10 percent and the slowdown in growth is expected to persist until the third quarter of 2015, University of Macau (UM) Associate Professor of Business Economics Ricardo Siu Chi Sen said Tuesday.
Siu spoke to reporters at a briefing session of the three-day gaming expo G2E Asia at the Venetian in Cotai. The annual fair opened yesterday.
Siu said that although gaming revenue hit record highs in February, the results were “very flat” for March and April.
“Golden Week results [in May] have been disappointing for some investors,” Siu said. “For this month, it won’t be too low but we won’t see 10 to 20 percent growth, it’s difficult to see that now.”“Golden Week” refers to the mainland’s long holiday periods such as for the May Day and National Day holidays.
In 2013, casinos’ gross revenue rose 18.6 percent year-on-year to 360.7 billion patacas.
Siu pointed out that as capital flow into the market remained low due to frugality measures imposed by the central government, which also affects investors’ confidence in the market, gaming revenue for May and June would remain low.
Siu predicted that Macau will only reach 10 to 12 percent growth in gaming revenue this year, rather than most analysts’ forecasts of 15 to 18 percent earlier in the year.
“This also depends on the government measures that may have an impact in August and October’s Golden Week,” Siu pointed out. “If there are new policies that we cannot foresee imposed then, causing the usually high season for gaming revenue to slow down, then the pressure is high on this year’s gaming revenue.”
Siu also said that he expects the slowdown to last until the third quarter next year when some of the six local gaming operators open their phase 2 projects in Cotai.
“New projects will appeal to visitors, which means growth for the mass and premium-mass markets,” Siu said.
Siu also pointed out that although Macau is not facing direct competition from other emerging gaming markets around Asia because of its location and relationship with mainland China, he warned that the new markets will mature and could be going up against Macau in 10 years’ time.
“In the foreseeable decade, competition will not be severe”, Siu said, “In 10 years time, it will be, so there needs to be a mechanism to encourage today’s investors to reinvest and renovate and build new facilities to keep Macau’s competitiveness and attractiveness in the long run.”