Xi Jinping visit to Macau in December could impact VIP gaming sector

The Chinese President visited Macau in 2014 for the 15th handover anniversary of Macau to Chinese administration, in a period that marked by a downturn in the local gaming sector revenues due to a crackdown on corruption by Chinese authorities.

“Five years ago before he came there were many kinds of crackdowns, tightening transit visa policies, the implementation of the smoking ban so in all sense there could be more negative in the policy side than positives. I won’t expect much recovery this year, but there could be a meaningful recovery in the first half of next year,” the analyst said.

Some reports have even expressed that President Xi could maybe avoid visiting Macau due to the political crisis caused in Hong Kong by the extradition bill controversy.

Data released by the Gaming Inspection and Co-ordination Bureau (DICJ) indicated that VIP sector results – represented by VIP Baccarat – in the first half of this year, dropped 14.5 per cent year-on-year to MOP71.8 billion (US$8.9 billion).

The analyst also considered that most VIP players were moving to lower-end tiers such as premium mass, which was leading to larger competition in this sector.

Ms. Lee noted that the opening of the Hong Kong-Zhuhai-Macau Bridge (HZMB) in August, 2018 helped increase tourist traffic from the mainland to Macau, but she described it as “low-quality traffic” as most people were mass-market gamblers who did not bet as much as high rollers.

That mass-market increase, however, was still sustaining overall gross gaming revenue in the city despite the VIP sector being “hammered” by Chinese macro-economic issues such as the trade war, but that growth would need to be supported by more positive visa policies which would be unlikely to be enforced this year.

In total Macau’s gross gaming revenues decreased by 0.5 per cent year-on-year to MOP149.50 billion in the first six months of this year.