Trends in gambling in 2016

Wednesday, 6 January 2016

Seems to come an excited year in gaming industry worldwide. What expectations to have nobody knows exactly, but we can find if we read the next article.

 

The Philippines Gaming Industry Remains Optimistic for 2016

According to Asian.travel the Chinese consumers turning more prudent under an economic slowdown and an anti-corruption campaign, the gaming industry in the region feels partially the pinch of China austerity cure. Macau, Asia’s capital of gambling and games, has recorded its 17th straight month of declining gamins revenues. The Southern Chinese city has seen its revenues plunging by 35% in October…

The contagion is spreading across Asia. In Singapore, the latest trends report of bank UBS mentioned about a potential decline of 11% in GGR (Gross Gaming Revenue) for the year 2015; In its note, UBS analyst Robin Farley highlights the fact that gaming are affected by the weakening of the VIP gaming market. The latter is expected to decline 26% in 2015. The Philippines gaming market is also on a declining trend, according to First Metro Investment Corp. (FMIC), the investment arm of George Ty-led Metro Bank Group.

In its report, FMIC said that Philippines casino and hotel operators have seen their share declining as there is ongoing concern over the Chinese and the VIP gaming market, following Macau trends. The Philippines gaming market is also affected by political disputes between the country and China over territories’ issues in the South China Sea.

Bloomberry used to get 25% of its GGR from China, while Melco Crown (Philippines) Resorts Corp. (MCP) has been working with its sister company in Macau. Bloomberry has switched by targeting more the local market, which however brings lower revenues. This translated for the company by disappointing first-half results with a net loss as Bloomberry Resorts had also to cover the costs of opening the nex Sly Tower at its Solaire property. Melco Crown (Philippines) Resorts, on the other hand, also suffered losses due to the ramp-up stage of the City of Dreams Manila.

The slump would not laast for too long in the Philippines with local operators remaining optimistic over 2016. Both Bloomberry and Melco Crown expect to turn a profit next year due to rising revenues from gaming and non-gaming activities.

Macau November Casino Revenue Slumps 32.3% as China Curbs Hit VIP Gambling

Bloomberg.com announce as that Macau’s casino revenue fell for the 18th straight month in November, as China’s moves to curb illicit money flows from the mainland deterred the high-stakes players who rely on junket promoters for betting loans. Gross gaming revenue fell 32.3 % to 16.4 billion patacas ($2.1 billion), according to data released by Macau’s Gaming Inspection and Coordination Bureau. Gaming revenue in the world’s largest center of gambling has fallen 35.3 % so far this year.

Macau’s casino industry has been on a downward spiral since mid-2014, as China’s slowing economy and its campaign against corruption scared off Chinese VIP players and hurt mass-market gambling. These high-stakes punters, typically measured via their favorite card game baccarat, have led the decline since the downturn started.

Macau, which relies on gamblers for about two-thirds of economic output, saw its economy shrink 24.2 % in the three months through September. The Chinese city’s GDP is expected to fall more than 20 % this year, local broadcaster Teledifusão de Macau reported soon, citing Secretary for Economy and Finance Lionel Leong.

China’s heightened oversight on its underground banking system “will likely continue generating headwinds for Macau’s VIP business,” Sanford C. Bernstein analyst Vitaly Umansky wrote in a note on Nov 24.

Macau’s government last year tightened scrutiny of junkets, amid concerns some illegal funds are being taken out of the mainland into the territory through these gambling promoters. China said in November it cracked the nation’s biggest “underground bank,” which handled 410 billion yuan ($64 billion) of illegal foreign-exchange transactions, as the authorities try to rein in capital outflows that have hit records this year.

Any recovery in Macau’s gambling industry may also be damped by delays in the city’s infrastructure building efforts, such as the completion of a bridge linking Hong Kong with Macau, and the city of Zhuhai on the mainland, part of which has been postponed by a year to end-2017. China unexpectedly devalued the yuan in August as it sought to boost economic growth. The weakened currency hurts Macau as it means converting yuan to the greenback-pegged Hong Kong dollar, the main currency used in the city’s casinos, will cost gamblers more.

Casinos outside Atlantic City?

Also Bloomberg.com said that the democrats who control the New Jersey legislature are in talks to get a measure on the November 2016 ballot that would ask voters to allow casinos outside Atlantic City.

The move requires an amendment to the constitution, which limited gambling houses to the seaside resort at the state’s southern end nearly 40 years ago. State Senator Paul Sarlo, a Democrat from Wood-Ridge in Bergen County, said allowing gambling in other towns is crucial to reclaim tax revenue that has gone to New York and Pennsylvania.

Atlantic City has been pushed into state financial oversight after losing its onetime dominance over East Coast gambling. Casino revenue declined to $2.9 billion in 2014 from a peak of $5.2 billion in 2006. Pennsylvania, Delaware, Maryland and New York expanded gambling. So far this year, total revenue is down 10 % from last year, when four of 12 casinos closed.

Governor Chris Christie, a second-term Republican running for president, has struggled to revive the coastal community of almost 40,000 people, about one-third of whom live in poverty. After years of refusing to consider a northern expansion of casinos, Christie said this year he would be open to the idea if some of the new revenue went to Atlantic City.

The full economic impact of expansion is unclear. Adding the casinos in the populous northern section of the state would allow it to tap into gamblers who would otherwise travel to New York and Pennsylvania. Jeffrey Gural, a New York real-estate executive spearheading the effort to construct a casino at his Meadowlands Racetrack in East Rutherford, said a gambling expansion would help Atlantic City and the state’s struggling horse-racing industry.

2016 promises to be a year of decline in the gambling business, in the best case scenario a stagnation. After Asia in recent years had shown its world supremacy in this domain, the coming year will be a turning point in terms of balance of power between the US and Asia. The Americans are showing signs of recover gradually, while in Macau, Singapore, the Philippines and the rest of the region this crisis will be worst.

Author: Editor

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