Inside Asian Gaming

INSIDE ASIAN GAMING | January 2011 20 M organ Stanley Research Asia/Pacific’s latest report, ‘Macau Gaming & Property 2011: Another Year of Outperformance’, presents a number of potential scenarios for the coming year. It refers to them as ‘themes’ and provides data in support of each hypothesis, while being careful not to state any of them overtly as ‘predictions’. One of these potential scenarios is titled “VIP in the Near Term; Mass in the Medium Term”. Morgan Stanley offers an argument that the trend in the growth of mass market gaming revenue is likely to continue. Under a sub-heading titled “Mass is for the long run: Revenue growth less volatile than VIP”, the report, by Praveen Choudhary, Executive Director, and Calvin Ho, Research Associate, Morgan Stanley Asia Ltd, offers the following analysis: “Mass gaming revenue tends to be less volatile than VIP, which tends to follow cyclical indicators such as new loan creation and Chinese property prices. Hence the former should be more defensive than the latter in an industry downturn.” High Mass Will 2011 mark a shift in the balance of power between high roller action and main floor gaming in Macau? Morgan Stanley Research considers the possibilities Mass Revenue: Less Volatile than VIP -40% -20% 0% 20% 40% 60% 80% 100% May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 VIP Roll YoY % Mass Revenue YoY % YoY % Source: Industry data, DICJ, DSEC, Morgan Stanley Research Market Outlook