Bernstein denies Hainan threat to Macau

According to the brokerage, the gambling expansion in China may be a threat to Hengqin but not to Macau.

China.- The potential gambling expansion in China could bring the industry to Hainan and turn the island into the newest market in Asia. Brokerage Sanford C. Bernstein assessed the potential impact the decision may have and denied it could pose a threat to Macau.

Though there were concerns about a possible negative impact on Macau, Bernstein explained that the introduction of horse racing and sports lottery on Hainan won’t hurt the current casino monopoly in the country. However, the development of a gaming industry in the southernmost island in China may actually hurt Hengqin island’s aspirations to establish itself as a strong non-gaming tourist attraction.

“Hainan’s tourism development, coupled with infrastructure improvement and duty-free shopping, may shift the focus away from developing Hengqin to the same level as had been originally contemplated,” analysts Vitaly Umansky, Zhen Gong and Cathy Huang wrote, but added: “It is still too early to say whether there will be an impact on future Hengqin development plans.”

Furthermore, Bernstein analysts denied any indications on potential casino developments in Hainan and assessed: “While any casino legalisation on Hainan would create problems for Macau, we do not see casino development in China as a realistic threat to Macau now or in the foreseeable future.”