Inside Asian Gaming

20 supply, with gaming tables to more than double by 2008, it is clear that blended table win will drop significantly over the period. We forecast average daily table win will fall from around US$10,700 in 2005 to US$6,100 in 2006, and eventually to US$4,700 by 2008. A two-tier market Investors should note the large differen- tial in average daily table wins between the high-roller and mass market segments. We estimate the average high roller table achieved daily wins of around US$28,600 in 2005, whereas the estimated average mass market table achieved daily wins of around US$5,000.By 2008,we expect these figures to drop to US$9,500 and US$2,900 respectively. Despite our forecast dip in table wins, we ex- pect that by 2008 the mass market table win in Macau will still be significantly higher than the average daily win achieved in Las Vegas (US$2,605 in 2005) Visitation Tourist arrivals to Macau grew at a 16% Cagr through 2001-05. This has been driven by the increase in mainland Chinese visitors, which grew at a compound rate of 37% over the same period. Of the 18.7 million visitors to Macau in 2005, 56% came from Mainland China, 30% from Hong Kong and 8% from Taiwan. The relaxation of visa restrictions for in- dividual travelers from China has been the key driver of visitation. Since the Individual Visitor Scheme (IVS) was launched in 2003, coverage has been expanded to 44 cities, accounting for 15-20% of the most affluent people in Mainland China.Under the scheme, around 10m Mainland Chinese tourists have visited HK/Macau since 2003. Looking ahead, we estimate tourist arriv- als to achieve a 15% Cagr through 2006-09 to reach 28.5 million, driven by a pipeline of new casinos, improvements in tourism infra- structure, and the continuing strength of the Chinese economy. Table win by market segment 30,000 20,000 10,000 – (US$/table/day) Macau average VIP market Mass market 2004 2005 2006F 2007F 2008F 2009F 12,400 10,700 6,400 4,700 4,700 4,300 Source: Deutsche Bank 2003 2004 2005 2006F 2007F 2008F 2009F 2006-09F cagr Mass market gaming revenue (US$m) 761 1,331 1,936 2,614 3,659 5,123 6,147 33% yoy chg (%) 12% 75% 45% 35% 40% 40% 20% Tourist arrivals (m) 11.9 16.7 18.7 21.5 24.7 28.5 32.7 15% yoy chg (%) 3% 40% 12% 15% 15% 15% 15% Visitor length of stay (days) 1.2 1.2 1.2 1.3 1.5 1.6 1.7 9% yoy chg (%) -8% 0% 0% 8% 15% 7% 6% Gaming revenue per visitor per day (US$m) 53.28 66.53 86.23 93.43 98.58 112.51 110.50 6% yoy chg (%) 17% 25% 30% 8% 6% 14% -2% Mass market gaming segment - key growth drivers Source: Deutsche Bank , -/ ,Ê/" 9t egZhZcih 7¬ÚÐv˜ÓÜvÐڃ¬ÐÚܕ˜ÓÚÓ壣˜ÜÚë˜Ó˜ÜÚ ìììÀvåЬ£¬¨vîÓv£˜¨JÐÓÀb¬£Ù .ôØ Ú ¬ÐÚbJŸŸÚ Ã{ˆãÚã{‹ãÚØ©ã© Ú ¬ÐÚÓ»¬¨Ó¬Ðӕ˜»Ú¬»»¬ÐÜ娘ܘvÓÚ»ŸvJÓvÚb¬¨ÜJbÜÚ b¬¬XîÀ•åJ¨VvåЬ£¬¨vîJӘJÀb¬£ J£˜¨Ú ӘJÚ . Jb˜ƒ˜b 4壣˜ÜÚãôôØ ã{ ܕ ÚQÚ㩠ܕ Ú4v»Üv£XvÐÚãôôØ "JbJåÚ ˜Ó•vУJ¨ÍÓÚB•JЃÚ~Ú ¬¨ëv¨Ü˜¬¨ÚQÚ í•˜X˜Ü˜¬¨Ú v¨ÜÐviÚ"JbJå 3 ÚE%;Ú " Æ Ì7•vڟJЍvÓÜڍJܕvИ¨Ú¬ƒÚ ӘJÍÓÚbJӘ¨¬ÚJ£˜¨Ú˜¨låÓÜÐîڻЬƒvÓӘ¬¨JŸÓiÚ ˜¨ëvÓܬÐÓÚJ¨lÚbJ»˜ÜJŸÚ£JОvÜÓÚví»vÐÜÓÍ vJÐڃЬ£ÚžvîڇåÐvÓژ¨ë¬Ÿëvlژ¨ÚܕvڍŸ¬XJŸÚ J£˜¨Ú˜¨låÓÜÐîژ¨bŸål˜¨h aÚ ¬ÐvÚ%Ÿ˜ëv˜ÐJ iÚ"JbJåÚ J£˜¨Ú ¬££˜ÓӘ¬¨ aÚ B˜ŸŸ˜J£Ú3ÀÚ Jl˜¨Ü¬¨ iÚ;¨˜ëvÐӘÜîÚ¬ƒÚ#vëJlJÚ½3v¨¬¾ aÚ 4vJ¨Ú"¬¨J•J¨ iÚ"vÐИŸŸÚ î¨b• aÚ .vÜvÐÚ J˜ŸŸJÐl iÚ7JXb¬Ð» aÚ "˜b•JvŸÚ •v¨ i Ú JÐÐJ•ÍÓÚ ¨ÜvÐÜJ˜¨£v¨Ü aÚ ÀÚ ÀÚ ¬¬ iÚ4 " aÚ Jë˜lÚ •˜å iÚ JÐÚ JÓÜÚ ¬¨Ó¬Ðܘå£Ú aÚ AJ¨vÓÓJÚ J¨ iÚ £»vЬÐÚ Ð¬å» aÚ 3¬XvÐÜ¬Ú JÓÜЬi Ú. %3 aÚ ˜¨Ú"J¨Ú v¬¨i Ú.JÐJl˜ÓvÚBJŸžvЗ•˜ŸŸÚ JӘ¨¬ aÚ 7JžJӕ˜Ú ˜Ó¬i Ú ¨ÜvÐÜJ˜¨£v¨ÜÚ åӘ¨vÓÓÚ ¨ÓܘÜåÜv aÚ åìÚ v¨ž˜¨Ó iÚ Ÿ˜„¬ÐlÚ •J¨bv aÚ 3¬XvÐÜÚ"¬¬¨iÚ " "Ú"˜ÐJv aÚ ¨Ü•¬¨îÚ JÐÜvÐiÚ JŸJíîÚ ¨ÜvÐÜJ˜¨£v¨Ü J£˜¨Ú ӘJÚ.Jb˜‡bÚ옟ŸÚ˜ëvÚJÜÜv¨lvvÓÚJÚ »vÐÓ»vbܘëvÚ¬¨h a Ú Ó˜J¨ÚJ£˜¨ÚŸJ¨lÓbJ»vÚ~ÚÐv묟åܘ¬¨JÐîÚb•J¨vhÚ åÜåÐvÚ»¬Üv¨Ü˜JŸÚJ¨lÚÜÐv¨lÓژ¨Ú ӘJÚ.Jb˜‡bڍJ£˜¨ a Ú %»vÐJܬÐÚÓÜÐJÜv˜vÓژ¨Ú ӘJÚ a Ú JbܬÐÓÚlИ똨ÚܕvÚbåÐÐv¨ÜڍЬìÜ•Ú a Ú ˜¨J¨b˜¨ÚJ£˜¨Ú»Ð¬vbÜÓÚ a Ú 3vŸJÜvlژ¨ëvÓܘ¨Ú¬»»¬ÐÜ娘ܘvÓÚJ¨lڞvîÚÐ˜ÓžÚ ƒJbܬÐÓژ¨ë¬ŸëvlÚ a Ú ˜ÓbåÓӘ¬¨ÚƒÐ¬£ÚžvîÚ Ó˜J¨Úb¬å¨ÜИvÓژ¨ë¬Ÿëvlژ¨Ú ܕvڍJ£˜¨Ú£JОvÜ a Ú 3våŸJܬÐîÚJÓ»vbÜÓÚ¬ƒÚJ£˜¨Ú˜¨Ú"JbJåÚ a Ú llÐvÓӘ¨Úb•JŸŸv¨vÓÚJÓÓ¬b˜JÜvlÚì˜Ü•ÚܕvڍJ£˜¨Ú X¬¬£Ú˜¨Ú"JbJå a Ú "JbJåÚëÓÀÚ JÓÚAvJÓÚ~ڟvÓÓ¬¨ÓÚܬÚXvڟvJШvl HjeedgiZY Wn/ asia law HedchdgZY Wn/ Source: Deutsche Bank Macau gaming demand forecast 12,000 10,000 8,000 6,000 4,000 2,000 – (US$m) Slot machines VIP market Mass market 2004 2005 2006F 2007F 2008F 2009F 5,000 5,600 6,500 7,800 9,700 11,400 19% Cagr