The year ahead - Ben Lee

Wednesday 4th of January 2017

Looking forward to 2017, the picture is less than clear. With the recent detention and arrests of Crown’s staff in China, all but one of the operators in Macau have ceased their direct marketing efforts across the border. Most if not all the foreign operators who have been targeting China have adopted the same risk minimization approach. What this means is that the direct VIP/Premium Mass players who have been relying on the casinos’ own staff to facilitate their logistics and assist with their funds transfers, will probably end up going back to the junkets. This is after all the raison d’etre for this unique Asian business model in the first place.

The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.

China has previously warned Macau to keep its gaming industry under control, and if past comments were to serve as guide, we need to maintain a growth rate consistent with China’s own GDP growth forecast. Any increases higher than that would most likely elicit a response reminiscent of 2014.

A clearer picture of the future direction of the gaming industry will emerge once the new Director of the China Liaison Office in Macau has reviewed 2016 in its entirety, and given us his comments, and that will probably be some time in Q1. The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.

A single digit growth in line with China’s own economic growth will probably be our guide.

Note from Ben Lee, managing partner IGamiX Management & Consulting.

Other notes from:

Andrew Klebanow, Global Market Advisors

Augustine Vinh, president and CEO of Stellar Management

David Green, CEO of Newpage Consulting

Ebbe Groes, CEO of EveryMatrix

Harmen Brenninkmeijer, managing partner at Dynamic Partners

Jay Sayta, founder of Glaws.com

Michael Zhu, vice president, operations, planning, analysis of Innovation Group

Mike Santangelo

Sam Sheng, director of Double Square Consulting

Steve Gallaway, Global Market Advisors

Sudhir Kale, CEO of GamePlan Consulting

Tim Shepherd, co-founder and president of business development at Silver Heritage Group