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Gaming to grow 17-27 pct in 2011
(source: 05 Jan 2011 Macao Daily)

Gaming to grow 17-27 pct in 2011: analysts
05/01/2011 03:00:00

Local casino revenue will grow between 17 and 27 percent this year, according to several analysts.
The most positive forecast comes from Galaviz & Company managing director Jonathan Galaviz. “Macau’s casino revenue in 2011 has a very good chance of reaching USD 30 billion [MOP 240 billion] if the macro-economic environment of China remains strong and stable,” he told Macau Daily Times (MDT).
This prediction would represent a 27.4 percent increase from the 2010 figures – a significant slowdown after a 57.8 percent growth. “The absolute level of the market is massive so it’s hard to sustain that level of growth,” CLSA’s head of Asian gaming research Aaron Fischer wrote in a note to clients. He expects Macau’s gaming revenue to grow 20 percent.
“While the percentage of growth will moderate, the absolute dollar volume growth will continue to be significant,” Galaviz stressed. “There continues to be a massive amount of monetary liquidity in China and greater Asia that is contributing to Macau’s performance,” he explained.
Chris Zee, Macau gaming analyst for BNP Paribas Securities Asia, shares his optimism and forecasts a 25 percent growth. Deutsche Bank analyst Karen Tang agrees and says mass market revenue will rise 35 percent, more than VIP revenue, as the Wuhan–Guangzhou High-Speed Railway will expand Macau’s catchment area.

‘Variables abound’

However, there are other reasons to be cautious, Galaviz warned. “Excess liquidity in Asia, and its eventual withdraw, will pose significant risks for Macau’s casino gaming industry moving forward,” he explained.
Bernstein Research analyst Janet Brashear also recalled that “Government and economic variables abound,” from the 5,500 gaming table cap to the Administration’s pledge not to approve anymore casino projects, as well as “possible new rules for VIP operators”. She predicts a 17 percent revenue growth but “there could easily be a 10 percent swing in either direction”.
Furthermore, Macau may have long ago overtaken Las Vegas but “it is still lacking the indicators of a true global tourism destination,” Galaviz bemoaned. “The average length of stay in Las Vegas is nearly four nights while Macau’s is barely over one night,” he emphasised.
Galaxy Entertainment is mentioned as the potential winner of 2011, as its Galaxy Macau resort is slated to open in the next few months. “I expect Galaxy’s gross gaming revenue market share to rise to 15 percent in 2011 from about 11 percent in 2010,” Chris Zee said in an email statement to MDT.
The Galaxy project will also bring “true balance of gaming revenue between Cotai and the Macau peninsula,” Galaviz predicted.

http://www.macaudailytimes.com.mo/macau/20790-Gaming-grow---pct-2011-analysts.html

Date Posted: 07-Jan-2011



 
 
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