Inside Asian Gaming

inside asian gaming June 2014 18 In Focus a potential 64% drop in mass table revenue from wider UnionPay restrictions. Mr Tulk calculates a worst-case crackdown could impact EBITDA (earnings before interest, taxes, depreciation and amortization) by one-third. But that worst-case remains unlikely, in his view, and he maintains an “outperform” rating on the shares of five of the six operators. PLENTY OF SMOKE, LITTLE FIRE Adding to the UnionPay news was an exposé by China state broadcaster CCTV on mainlanders who extend their visits to Macau by obtaining visas for travel to other countries but never actually go to those countries. It’s estimated that up to 11% of mainland arrivals last year were a result of such abuses. Officials say they will make unspecified changes to the transit visa regime effective 1st of July. “They’re closing a loophole,” Mr Tulk says, noting that any changes will affect a small number of visitors. “Some people can find alternate ways to visit or will spend more when they do come.” Transit visa travelers to Macau may, for example, simply follow through with a day trip to a nearby destination such as Hanoi or Manila and return to Macau to spend the additional days allotted upon their return. But if stays in Macau are cut to two or three days under the system, as some predict, Mr Choudhary, for one, says it could impact VIP players, who often stay in Macau for three or four days. He suggests that junkets also use transit visas to bring their Macau’s Ace in the Hole By Muhammad Cohen Melco Crown Entertainment Executive Vice President and chief of international marketing Kelvin Tan presented the bull case for Macau at last month’s Global Gaming Expo Asia. His presentation, which keyed on the underlying strength of mainland China’s consumers, provided a counterpoint to many of the concerns behind the negative headlines of recent weeks. Noting that Macau’s gaming revenue growth has strongly correlated with China’s GDP growth, Mr Tan acknowledged that mainland GDP growth slowing to 7.4% in the first quarter and a 9.4% contraction in private lending in the first four months of the year, offer cause for apprehension. However, he believes Premier Li Ke Qiang’s government is balancing efforts to rein in money supply growth with a mix of macroeconomic measures and reforms to stimulate the economy. Stimulus initiatives include encouraging urbanization, featuring development of 10 new metropolitan areas across the country. Property developers are already making investments of upwards of US$100 billion in these areas, substituting for government The VIP trade has featured in some negative headlines dating back to the March conviction in Hong Kong of sportsman and junket investor Carson Yeung for money laundering.