Macau opinion | New Year bet

As the end of the year approaches, in all walks of life and for all activities a standard question pops up: what will next year be like? We would never feel satisfied with an answer such as: “possibly very like last year, bar a few (by definition, unforeseeable) surprises”! Would we? Somehow, we like to think that 1st January is in some way different from the 31st December, notwithstanding evidence to the contrary.

In a city and economy like ours, the standard question becomes: what is going to happen in gambling? The forecasting business has not been too successful in the past. Few foresaw the size of the boom or saw the crash coming. But we are usually protected by a short memory span regarding our failures, and we are likely to accept good, hopeful news a bit more uncritically. These are well known human traits – if you allow me a bit of pop psychology.

So, it is no surprise that all kinds of so-called analysts and experts are being asked about what next year holds for the casino industry. For the sake of convenience and ease, let us just look into the site of one of our leading news agencies. We can see the tone is optimistic. Macau casinos are ‘looking to make a comeback’ we were told earlier this month. Now the tone is more assertive. Two separate pieces reassure us that Macau casino profits are ‘poised to surge’ and ‘set to surge.’

The casino industry has been recovering from a difficult period, as it were, caused by actions springing from what some people call, perhaps a bit euphemistically, ‘China regulatory risks.’ Simply put, the Mainland authorities looked threateningly at gambling and related financial transactions, stopping or scaring away big (and possibly not so big) gamblers. Revenue took a beating. For several quarters in a row, the question was an altogether different one: when will the (relative) rout stop?

As the pressure eased, as eventually it was bound to, industry growth re-started. A growth rate of one or two low digits (calculated on a much smaller base) is not extraordinary or unexpected. So I can predict with confidence that casino revenue will rise steadily next year and beyond (unless unforeseen external risks, regulatory or otherwise, put it in jeopardy). With this renewed confidence, we can all now invest prudently in the sector. Wishing you all a Happy 2018!