Date
19 November 2017
Investment banks are keeping a grim outlook on revenue growth for this year and next for Macau casinos. Photo: Bloomberg
Investment banks are keeping a grim outlook on revenue growth for this year and next for Macau casinos. Photo: Bloomberg

Smoking ban seen worsening Macau casino woes

Macau gaming operators, already hurting from falling business, are bracing for more pain after a smoking ban came into force on Monday.

The ban in mass gaming areas is expected to drag on revenue growth in this segment, Sina Finance reported Tuesday, citing Citibank.

Deutsche Bank also said the negative impact of the move may surpass market expectations.

Macau’s gross gaming revenue fell 11.7 percent to 25.56 billion patacas (US$3.2 billion) in September, the most in five years, according to the Gaming Inspection and Coordination Bureau.

Despite the bad news, Macau gaming stocks rose sharply Tuesday, with Sands China (01928.HK) closing up 6.98 percent and Galaxy Entertainment (00027.HK) rising 6.06 percent. The two stocks had gone up just over 1 percent in the morning session.

Meanwhile, investment banks maintained a grim outlook on revenue growth for this year and prospects for the coming year are increasingly pessimistic.

Bank of America Merrill Lynch said that in a worst-case scenario, the VIP segment will slump 8 percent and mass gaming may see no growth.

Deutsche Bank cut its revenue growth estimate to 1 percent this year while Morgan Stanley slashed its expectation to zero from 11 percent.

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JH/JP/RA

EJ Insight reporter

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