IAG March 2015 - page 8

inside
asiangaming
March2015
8
Cover Story
THEXFACTOR
Another variable that will have a profound effect going forward on
Macau’s mass-market gaming revenue—and might already be
exerting its sway in the market’s current softness—is the rapidly
evolving tastes of China’smiddle class.
At the turn of the millennium, China’s middle class was an
almost negligible force. According to a study published in 2013
by management consultancy McKinsey & Company that’s come
to be considered the definitive overview of China’s rising middle
MassMarket’sUnbrokenRunEnds
|MacauGamingRevenuebySegment
42,498
48,412
51,627
53,235
52,482
52,232
51,051
47%
49%
51%
31%
23%
8%
-1%
73%
74%
74%
72%
71%
70%
68%
13,263
14,305
15,702
17,177
18,379
18,822
20,297
31%
38%
42%
42%
39%
32%
29%
23%
22%
22%
23%
25%
25%
27%
2,760
2,888
2,897
3,105
3,455
3,361
3,233
46%
47%
30%
25%
25%
16%
12%
5%
4%
4%
4%
5%
5%
4%
58,521
65,605
70,225
73,517
74,315
74,415
74,581
43%
46%
48%
33%
27%
13%
15%
VIPRevenue
(MOPmn)
YoYChange
Shareof Total
Revenue
MassTable
Revenue (MOPmn)
YoYChange
Shareof Total
Revenue
SlotRevenue
(MOPmn)
YoYChange
Shareof Total
Revenue
TotalRevenue
(MOPmn)
YoYChange
1Q ‘11 2Q ‘11 3Q ‘11
4Q ‘11 1Q ‘12 2Q ‘12 3Q ‘12
“TheseG2 consumers todayare typically
teenagersandpeople in theirearly20s,
bornafter themid-1980sandraised in
aperiodof relativeabundance.…They
are confident, independentminded, and
determined todisplay that independence
through their consumption.
UnionPay crackdownmight be felt only later.
Discounting the effects of the smoking ban and UnionPay
crackdownwould largely cancel out themass-market revenuedecline
in the fourth quarter. Evenwithout these twomajor drags, however,
massmarket growthwould likely still have downshifted for amyriad
of reasons, among them China’s slowing economy, the supply
constraint imposed by the table cap, the lack of significant new
attractions ahead of the arrival of the second wave of Cotai resorts
andMacau’s infrastructure bottlenecks.
1,2,3,4,5,6,7 9,10,11,12,13,14,15,16,17,18,...48
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