Analysts from Sanford C. Bernstein expect that the ‘paradigm shift’ in the local gaming market from mass to VIP will continue despite the ‘economically disastrous’ Covid-19 pandemic.
‘The shift in the market will continue in the over the coming years, driven by still low Chinese penetration, incremental capacity expansion, and transportation improvements. Increasing visitation and spend per visitor will drive long-term secular growth in the industry,’ the brokerage indicated in a note.
Local gross gaming revenues went down by 77.4 per cent year-on-year in the first half of this year, to about MOP33.7 billion (US$4.2 billion).
Overall, Bernstein analysts estimate that local gross gaming revenues will grow at a Compound annual growth rate of 7 per cent to US$47 billion by 2023, led by a 8 per cent annual growth rate from the mass market, including premium and grind mass.
The brokerage noted that VIP accounted for 73 per cent of total GGR in 2011, going down to 39 per cent in 2019 and with estimates that it will drop to less than a third by 2023.
Recently brokerage Morgan Stanley indicated in a report that local gaming operators should break even in the third quarter of this year, with recovery still dependant on Chinese authorities reinstating the individual visa scheme (IVS).