As Macau’s gaming industry continues to improve and VIP players defy expectations by returning to the city’s casinos, stock values for the city’s gaming operators have soared. Thanks in part to an improving Chinese economy, casino operators in the gaming hub have experienced amazing growth over the past 10 months.
According to Reuters, the big winners include Galaxy Entertainment, up 77 percent; Wynn Macau, up 45 percent; and Sands China, up 17 percent.
The boom may not last as the Beijing government once again cracks down on the flow of funds from the mainland to Macau. Among the measures are stricter controls on ATM withdrawals and increasing audits of junket operators.
In other Macau news, Las Vegas Sands President and Chief Operating Officer Rob Goldstein says the city needs more hotel rooms to enjoy more mass-market play—despite the addition of several new integrated resorts with hotels on the Cotai Strip.
“Macau will need more hotel rooms in Macau and Hengqin in the future in order to drive mass growth,” Goldstein said. “The current inventory will not be enough. Future mass growth will come from the non-Guangdong provinces in China which will be largely overnight visitation.”
He added that the China unit of the Las Vegas-based Sands Corp. is “happy” to see the growth of the junket business in Macau. “It adds liquidity and fuels the premium mass segment,” Goldstein said, speaking at the 33rd Annual Bernstein Strategic Decisions Conference, held June 1 in New York City.
“The junket business is important beyond the simple profit perspective,” said Goldstein. “Part of the success in premium mass is that the junket liquidity and junket success fuels premium mass play because the two do cross over.”
He expressed confidence in the overall market. “I think all gaming segments in Macau are rising. I would like to see mass grow stronger, premium mass is very strong and junket looks good. But the whole market feels good and is in a good growth pattern.”
GGR in Macau jumped 23.7 percent year-on-year in May to MOP22.74 billion (US$2.83 billion), according to official data cited by GGRAsia. It was the 10th consecutive month of GGR growth in the market, and the biggest increase in year-on-year terms since February 2014.
“We believe the recovery we are seeing [in Macau] is both sustainable and can grow from here,” said Goldstein. “In Macau, the mass and premium mass drive the profitability. It’s not a junket market for us.”
Contrasting with Goldstein’s confidence, Macau Business reported that gaming analysts as a whole “remain cautious” about the city’s ongoing recovery in the light of new crackdowns by the Chinese government.
