Macau VIP growth to slow down in 2H

According to brokerage Sanford C. Bernstein, the VIP gambling sector will slow down in Macau during the second half of the year.

Macau.- Sanford C. Bernstein analysts published a memo assessing the VIP gambling segment in Macau and projected it will have a downturn during the second half of 2018. According to the brokerage, some mainland China measures may impact Macau’s gambling sector, as its mainly fueled by Chinese tourists.

Analysts Vitaly Umansky, Zhen Gong and Cathy Huang were in charge of the study and said: “Although it is likely to continue to show strength over the next few months (or even the next two quarters in 2018), the VIP model is likely to face structural headwinds in the latter part of 2018 from instituted cooling measures on Chinese real estate, a credit tightening in China, an increasing regulatory environment in Macau and continued Chinese government focus on capital outflows in China.”

Despite forecasting a slow down in gambling growth, analysts said it will still be “respectable growth” and “long term secular growth drivers are still in place.”

“In 2018, we expect total GGR to grow 10 percent year-on-year, and VIP GGR and mass GGR will grow 8 per cent year-on-year and 11 per cent year-on-year respectively,” says the memo.