If the VIP Gambling Revenue in 2018 grew by 15 percent as compared to the last year, then Japanese brokerage firm Nomura believes that central government of China would not be troubled by it.
The institution revealed in a report released on Tuesday, that the growth statistics of casino gaming revenue (GGR) Macau for year 2018 were tempered. The 13 percent aggregate was “mixed” with few macroeconomics indicators in the second half of 2017.
“We believe Beijing is agnostic about modest VIP/junket growth (approximately 15 percent) as long as stricter AML [anti-money laundering] and ‘know your customer’ regulations are followed,” stated Nomura.
Macau regulatory authority, Gaming Inspection and Coordination Bureau, released data on Monday, which sketched an expansion of 19 percent in GGR for the year 2017 as compared to the year 2016. GGR recorded for the final quarter of year 2017 are due to be announced later this month, after which a thorough growth report will be officially released which will contain VIP and mass segment statistics.
In response to economic parameters established by the China central government, the Nomura insisted, “We believe that recent concerns over liquidity in the VIP sector are overblown given the continued strength in the Chinese economy as well as the volatility typically seen in month-to-month measures such as total social financing.”
The firm added, “Macroeconomic indicators in China, such as steel prices (which some view as a proxy for industrial spending trends) and total social financing growth, have… been mixed in recent months, which is why our outlook for 2018 GGR growth in Macau is positive (+13 percent) but not as strong as the nearly 20 percent growth in 2017.”
China State Administration of Foreign Exchange on Saturday announced a yearly limit on cash withdrawal from overseas using automated teller machines (ATMs). The regulations will be enacted from January 1st, 2018 and it will limit the amount to US $15,366 per person.
“Recall that in December 2016, news of daily ATM withdrawal limits sent Las Vegas Sands Corp, Melco [Resorts and Entertainment Ltd] and Wynn [Resorts Ltd] 11 percent to 14 percent lower in a single day but ultimately proved largely ineffective in crimping actual demand,” said Nomura.
Investment bank Morgan Stanley Asia Ltd believes the new regulation will affect the “low end” ATM customers as the VIP prefer to pay in cash rather than credit cards.
