VIP as a percentage of revenues is expected to go down to as low as 34 percent by 2022, according to estimates from Bernstein analysts.
In 2011, around 70 percent of gross revenues (including non-gaming) came from VIP. However, this figure fell to only 41 percent in 2018.
Bernstein said this is due to the structural growth of the mass market, which is less affected by luck, liquidity, and policy changes from the mainland.
“VIP every month/ quarter is often times dependent on the behavior and luck of a relatively small number of high rollers and driven much more by liquidity in China (i.e., flow of credit) and liquidity in Macau (in the junket system),” it said.
“While Mass has had some impact from policies (i.e., smoking ban that had an outsized impact on Mass GGR decline in 2015), the policy impacts on Mass have not had as extreme an impact on this segment as on VIP.”
Bernstein said the more stable contribution from mass will continue to dwarf VIP, causing investor attention will continue to shift away from VIP.
With revenue contribution from VIP declining, Bernstein said it also expected EBITDA contribution from VIP to become less meaningful as well, dropping to only 13 percent in 2022, compared to 42 percent in 2011 and 18 percent in 2018.
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