his Wednesday, Margaret Huang -Gaming analyst from Bloomberg- said that investors in the Macau SAR gaming market will have to be alert before risks of share volatibility, such as an expansion of the VIP market and the proximity of the gaming concessions’ renewal tender. In Huang's words during a Global Gaming Expo Asia (G2E Asia) press conference, "the recovery push really has been driven by the VIP market, with the Macau SAR gaming market coming from a low in 2016."
VIP gaming revenues for the whole of 2017 – represented by VIP Baccarat – went up 26.6 per cent yearly to USD 18.50 billion outpacing the 19 per cent yearly growth to an overall MOP265.74 billion for the year.
“That anti-extravagance and anti-corruption feeling has started to fade and you start seeing wealthy gamblers coming back and having a good time with so many amenities catering to them,” Ms. Huang said. “With that growth obviously comes risks. You’re talking about a market where one player can swing results. As an investor you really have to be aware of that.”
In order for gaming operators to avoid possible fluctuations and volatility in the VIP market, they should ensure they can cater to both mass and VIP segments, the gaming analyst believes.
“Every time results come out, stocks will bounce around. That’s what I mean by volatility risk. Inherently there is a positive solid demand coming to the market; you just need to be ready to ride it through,” she added.
When asked about the possible impact of the current investigations on Wynn Macau’s former chairman, Steve Wynn, the Bloomberg gaming analyst stated that the case could “maybe” have an impact in the US market due to his name association with the Wynn brand, while in Asia Wynn is seen more “as a product” than a brand.
Ms. Huang also stated investors will be observing closely any possible changes coming from the new MSAR Government gaming concessions’ tender.
“This is a very pivotal year, and this time around the way they will select [concession winners] is quite different […]. Certainly any changes in terms of additional licences or taking certain licences away will have an impact for all investors,” Ms. Huang stated.