Macau Gaming Market Faces Shrinking

Macau casino industry investors are reportedly expecting a single-digit drop in gaming revenue this year due to the cooling of China's economy and the impact of the trade war with the United States.

This is the opinion of Morningstar Asia Limited, an investment services company, but it forecasts that total gaming revenue from more than 30 casinos in the region will return to growth next year and record a greater increase thereafter.

"We now expect Macau game sales growth to return to low single-digit and moderate single-digit growth as the Chinese economy recovers. We don't expect the gaming sector to slow down this time because we haven't seen any signs of a gaming bubble."

On the news that China's GDP grew only 6.4% year-on-year in the fourth quarter, investment firm Chelsea Tam reportedly saw China's GDP grow only 6.4% year-on-year in the fourth quarter, the lowest growth rate since the global financial crisis. The figure reportedly marked China's lowest annual gross domestic product in 28 years at 6.6%.

Morningstar's survey reportedly predicted that total gaming revenue for Macau VIP players in 2019 will drop to 'high single digits' before recovering next year.

"Large game sales growth is expected to slow to low single digits in 2019 and accelerate back to high single digits." 슬롯머신

Despite the expected recession, analysts are said to have given a long-term rosy outlook for the Macau gaming market, driven by Macau's 'narrow moat' position and widespread belief that all six current casino operators should extend their licenses.

"I think the current weak sentiment provides good buying opportunities for long-term investors. Assuming that gaming revenue tax will increase by 1% annually over five years because all licenses will be renewed already captures the risk of stricter requirements."