While Macau may have broken its 26-month revenue losing streak, it wasn’t due to a resurgence of VIP gambling, the true state of which analysts are suggesting is even worse than the official Macau figures let on.
Q2 figures released by Macau’s Gaming Inspection and Coordination Bureau (DICJ) showed VIP revenue falling 15.7% year on year, but Union Gaming Securities claims the actual VIP decline was “in excess of 21%.”
The discrepancy is reportedly due to casino operators reclassifying some so-called ‘premium mass’ tables as VIP due to Macau’s smoking rules, which restricts tableside smoking to VIP rooms. The DICJ thus reports this revenue under the VIP column, despite the lack of appropriate VIP betting minimums or junket relationships.
Union Gaming is sticking with its earlier forecast of a 4% VIP decline for 2016 but concedes that it’s possible the VIP market “could continue to see double digit declines going forward even as the Macau market recovers.”