Post-Lunar New Year Pickup Buoys Casino Owners
Following a dip in VIP arrivals during the Lunar New Year holiday, and lower spending in 2012 amid sluggish economic growth in the Chinese Mainland, major casino owners in Macau have reported a pick-up in the number of Chinese high-stakes gamblers over the past two weeks. Accounting for around two-thirds of all casino revenue in the former Portuguese colony, these VIP gamblers are a linchpin of the local economy, yet over the past year top casinos have worried that a reported crackdown on junket operators would hit the bottom line.
However, as Bloomberg notes today, business seems to be picking up in the lucrative VIP segment, giving major players like MGM China hope that 2013 will be a better year in Macau:
MGM China yesterday said it hasn’t seen any sign of a Chinese crackdown on the junket operators who offer credit and bring VIP gamblers to Macau.
“There’s never any real, concrete indication or direction from the government,” said Pansy Ho, chairman of MGM China and daughter of Stanley Ho. “Although the growth rate of VIP business may slow, I’m not aware of any crackdown.”
MGM has a lot riding on its continued expansion effort in Macau, and yesterday broke ground on its first resort on the Cotai Strip — a Las Vegas Strip-like section of the city that has already attracted Sands China and Galaxy Entertainment Group. Bloomberg notes that MGM’s US$2.6 billion Cotai property will include “1,600 hotel rooms, as many as 500 gaming tables and 2,500 slot machines,” and is expected to open in mid-2016. By that time, the VIP/mass-market gambler ratio is expected to see a significant adjustment, though this — according to MGM China’s Pansy Ho — might not be a bad thing for the local casino industry.