RMB depreciation and Shanghai Disney a threat to Macau

Wednesday 1st of June 2016

A survey of 1,000 Chinese gamblers has revealed that UnionPay and FX risks, as well as Shanghai Disney are near-term threats to Macau.

In a note from Morgan Stanley, which covers the results of the AlphaWise annual gambler survey conducted on Chinese gamblers, the brokerage notes that Macau’s gaming recovery may be more reliant on China’s economy than consensus assumes.

According to the survey, Chinese respondents reported shorter stays, lower frequency of visits (from 4.4 to 3.3 visits per year) and a decline of total travel budgets.

Dependence on UnionPay cards for cash remains high at 60 percent, said Morgan Stanley, with 55 percent of respondents saying they would shorten their stay or search for cheaper options if the RMB depreciated.

This puts the premium mass segment at risk if there is a further clampdown on UnionPay cards, says the brokerage.

Finally, 30 percent of respondents also noted they may visit Macau less often once Shanghai Disney official opens in June.

A higher percentage of Chinese gamblers are now also choosing casinos outside of Macau, while the percentage for Macau remained flat.

On the positive side, 26 percent of respondents said they intend to gamble more in Macau in the next 12 months because of the Wynn Palace, with 70 of respondents still planning to go to Macau in the next 12 months.

The survey results also found that 51 percent of total respondents have gambled in Macau in the last 12 months, an increase from 30 percent in the survey last year.