p14-18 Macau:p14-18 Macau.qxd 01/12/2009 11:30 Page 16
MACAU BUSINESS
Bouncing
back
As gaming capital Las
Vegas continues to
struggle, Macau is on
the verge of a
lucrative recovery.
So say a visiting team
of researchers from
sin city
by Paula Campos
T
hree months of
growth have put the
feel-good factor
back into Macau, as
analysts predict
recovery and outside investors of time, I think Beijing will tighten the screws on this
begin looking at the city again. Chief makes his mark? market again, whether it comes in the form of visa
Between October 6 and 8, Some analysts also see this move as a way for restrictions, collection dynamics for junkets, or some
Las Vegas research firm Union outgoing Chief Executive other mechanism.’
Gaming Group brought a Edmund Ho Hau Wah, to make a final push to act And indeed it has – visa restrictions are back in
group of 10 investors to the on previous pledges to rein in the development of the place even if nobody ever officially announced it, or
city and they left with a casino industry. that they had been eased in the first place.
positive view, the man who In November 2007, Ho said the government would The fact is that as of October 1, Guangdong
organised the visit, Bill Lerner, increase the casino entry age for staff and customers residents can only travel to Macau once every two
told macaubusiness.com. to 21, and in that same month Tam first announced months and this could be another way for Beijing to
‘We had this period of plans to relocate slot machines. make sure things don’t get out of hand in Macau.
financial rescue deals - A year later, in April, the chief executive said the Nonetheless, as Ng sees it, this will not be enough
whether raising public equity government would seek to limit the number of gaming to slow things down: ‘Growth will still be very high.
in the US in order to resolve tables and slot machines, impose caps on junkets’ Travel restrictions will not slow it down because
equity problems or leverage commissions, and stop approving new casinos. growth is driven by the VIPs who have fewer travelling
issues and asset sales - starting The latter two have already been put into practice, restrictions.’
to combine with a stabilisation so the recently announced measures are nothing new, But with a new chief executive coming in, Beijing
of cash flow in the US, and a really. will surely be careful to make the transition as
nice recovery in cash flow here Ng sees another possible reason behind all this smooth as possible and to give the new government
in Macau. quest for control: ‘They might want to change the an easy start.
‘For investors coming into concession agreement because the original one gives
this market it’s hard to walk the government no control over casinos that can, for A record year?
away but with a very positive instance, put in more tables if they choose to. David Green, director at PricewaterhouseCoopers
view,’ Lerner, an analyst and ‘So, Macau wants to take back some of its power in Macau and a gaming analyst, thinks Macau will
founder of Union Gaming and to control things better and to avoid people close 2009 with outstanding results.
Group said. being laid-off in casinos.’ ‘We will hit a record year if it’s bigger than last year
Without revealing the and my feeling is that it will be. How much bigger, I
identity of the group, Lerner Cooling down can’t say. But my expectation is that it will probably
said that among them were Bill Lerner, partner of Las Vegas research firm be up to 10 percent ahead of what it was in 2008 -
mutual and hedge fund Union Gaming Group, thinks that more than just the which would be great because it only started to turn
investors either from the local government, Beijing is keeping an eye on in July,’ Green says.
United States or Asia trying to, Macau. Still, will this be a sustained period of growth or is
as he put it: ‘Understand the He tells Macau Business: ‘I would temper the the market over-reacting to positive figures?
changing dynamics of the optimism by saying that Beijing supports this market For Green, things can go either way: ‘It’s hard to
market.’ but doesn’t want to see it grow in a way that is call it a sustained growth after three months, but I
His company organises three problematic to the system in mainland China.’ The don’t think it’s an aberration,’ he says adding: ‘In the
to four such investor tours to analyst added that the central government will try to last three months, the growth trajectory has resumed
Macau a year and the next one make sure things don’t run out of control. its upward curve. I think we all know the reason why
ñ either at the end of this year ‘If we see excessive growth for an extended period the industry has suffered and I don’t think it’s over,
16 DECEMBER 2009
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