Macau to be $100b market by 2020, Wells Fargo predicts

Macau’s casino market is likely to more than double in size to generate revenue of about $100 billion a year by 2020, the Business Daily cited Wells Fargo senior gaming analyst Cameron McKnight as saying in an interview.
Mass market gaming is likely to lead the growth, with VIPs and junkets progressively accounting for a smaller proportion of the market than they do now.
However, acknowledging the current downturn, McKnight said: “Like all great growth stories, nothing occurs in a straight line and there are some issues that have to be worked through before growth resumes and that longer-term target is achieved.”
Gross gambling revenue has fallen in each of the past four months, dragged lower by a sharp decline in VIP revenues. China’s clampdown on corruption, and on the illegal use of China UnionPay terminals have crimped growth.
Many analysts have slashed their growth targets for this year and next, with Morgan Stanley now seeing the Macau market declining 17 percent in the first quarter of 2015 to $10.64 billion, compared with $12.84 billion in the same period in 2014. Fitch sees GGR this year growing 4 percent, compared with its earlier forecast for 10 percent growth, while Bank of America/Merrill Lynch sees no growth this year, or next.
Analysts are expecting the opening of new multi-billion resorts on Cotai, which are scheduled to begin opening from next year, to help kick start the market, providing more hotel room capacity. They are also likely to reduce current room rates, further helping growth of the more profitable mass market sector.