Slowdown of Chinese economy to hamper Macau’s gaming sector

The slowdown of China’s economic growth could affect Macau’s gross gaming revenue in the immediate future, says the global research team at brokerage Sanford C. Bernstein and Co LLC.

The firm has released a report that predicts Macau gross gaming revenue (GGR) will be hampered, especially in the second half of 2018, by the slowing of the Chinese Economy. The report, however, is optimistic on the overall growth of the industry.

The brokerage’s report indicates that the overheated mainland real estate market and a series of indicators reflecting declining economic performance also impacted in Macau’s GGR performance.

Analysts for Sanford Bernstein further explained that there are threats in the short run to the sustainability of high rates of growth in mass-market GGR, but forecasted an improvement in the long-term. The premium mass segment is also expected to hurt over the threats to mass-market GGR growth over the next 12 months.

The brokerage forecasted the Chinese GDP to grow around an annual rate of 5 per cent, which would enhance consumer spending and turn people wealthy enough to visit Macau. However, it announced that weaker-than-forecast performance by the supporting mainland economy or elements of the economy, changes in Chinese consumer attitude to casino gaming and the amount of action taken in mainland China and Macau to counter corruption may be factors that could harm the gaming industry in the Chinese territory.

Source: Focus Gaming News