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Macao to have moderate growth

2014-01-22 10:28 Global Times Web Editor: qindexing

Macao's gambling industry, which has rocketed in recent years, will see continued growth this year, but a moderate growth scenario is seen on the cards, estimations from Bloomberg Industries showed Tuesday.

Macao's gambling businesses may see slowing revenues in 2014 after years of rapid expansion, as new casino resort capacity will not be built before 2015, Tim Craighead, director of Asian research and senior gaming analyst at Bloomberg Industries, said Tuesday in Beijing while giving a briefing about his outlook for Asia's gaming sector.

The drought, however, will not last long, as a torrent of capacity to be opened over 2015-16 will flood the market instead, Craighead noted.

There would be a risk of oversupply, but it won't be a big concern if casino operators can execute well, he said in an interview with the Global Times Tuesday.

"Macao's government is very focused on moderating the supply increase," Craighead emphasized, downplaying fears of overheated competition by then.

Macao, a Special Administrative Region in China, is currently the world's largest casino hub, with revenues in gambling businesses totaling $45 billion in 2013, an increase of 18.6 percent over the previous year, according to figures released by the Macao government.

In contrast, Las Vegas, which used to be heralded as the global gambling hub, "will be lucky to make $6.5 billion" last year, CNN reported on January 6.

The main engine of growth for Macao's gambling revenues should be attributed to mainland visitors, who have continued to be more important for Macao over time, according to Craighead, who revealed mainland visitors accounted for over 60 percent of the total visitors to Macao casino resorts last year.

The central government's strengthened efforts to combat corruption after the new leadership came on board has yet to have any impact on Macao's growth, the analyst also said.

Consecutive acceleration has been seen in the VIP segment of Macao's casino businesses since the third quarter of 2012, when concerns over growth momentum of the overall Chinese economy had the segment posting a contraction, data from Bloomberg Industries showed.

The mass market has reportedly had a more robust performance, "growing by 30-40 percent over the course of the last four years, every quarter year-on-year," Craighead said.

As for Japan's possible entry into the regional scene, the analyst said "it's a long time before anything like that actually happens."

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