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China – Better than expected December still sees Macau decline

By - 4 January 2016

Macau’s casino sector slump continued for a 19th straight month of declines in December although with GGR falling by 21.2 per cent it marked the smallest year-on-year fall since last January and was better than most analyst expectations.

DS Kim, an analyst at JPMorgan Chase & Co said that anyalsts predictons for the decline were pitched bteween 20 and 28 per cent.
Grant Govertsen, an analyst with Union Gaming Group, said the December total was ‘about the best we could hope for in terms of finishing the year.’

He warned of further declines ahead in the coming year, forecasting a VIP gross gaming revenue decline of 12 percent.
“Our estimates contemplate continued demand weakness, which will likely be exacerbated by pressures on the regulatory front,” he said.

The full year saw GGR fall by 34.3 per cent to 231bn patacas (US$29bn) with around $45bn being wiped off the share value of the six concessionaires.

Aaron Fischer, an analyst at CLSA, said: “Macau has seen much greater pain in 2015 than everyone expected at the beginning of the year. It would be difficult for the first half of the year for sure because there’re not so many catalysts to drive a rebound.”

Having generated around seven times more than Las Vegas’ casinos in 2014, Macau now earns around 4.6 times more than its American rival.

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