Fitch predicts a 19% decrease in the Macau gambling industry profit growth rate in 2018. However, the market will benefit from the opening of new resorts, the development of existing facilities and a healthy Chinese economy.
Representatives of the agency believe that this year the profit growth from the mass segment will be 14%, and from the VIP segment - 9%. Moreover, Sands China Ltd. is in the best position for long-term growth. This is due to the reorientation of the urban gambling industry to the mass market and the increasing competition between the peninsula and the Cotai zone.
Fitch drew attention to the fact that gambling properties located outside the central part of the peninsula and “aimed at the mass segment” are likely to become uncompetitive. Among those who are fighting for "life" were Sands Macao and Altira Macau.
According to the agency's calculations, the opening of the Macau-Hong Kong-Zhuhai bridge will increase the number of tourists from Hong Kong to the peninsula.
Fitch Senior Director Alex Bumazhny is confident that Macau authorities do not intend to interfere with the working conditions of gambling operators renewing their license. But there are still some risks. We are talking about the introduction of a large one-time fee for re-registration of the license or the admission of the 7th participant in the concession. Another risk is an increase in the taxation of gambling. However, the agency considers such a step unlikely.
Fitch does not yet see any reason why the Macau casino industry could negatively affect other markets in the Asia-Pacific region.
Ivanov Harlam | Last update: 05.02.2018
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