Union Gaming Research Macao Ltd, a consultancy, says the recovery of Macau's VIP casino sector is likely to be delayed by China's plans to set up a new anti-corruption office.
China's central government is in the process of setting up a new high-level anti-corruption office, official Xinhua news agency reported over the weekend. The new agency will be run by the top prosecutor under the Supreme People's Prosecutor's Office.
The move "means the institutionalization of the anti-corruption movement," according to a memo released on Monday by Union Games analysts Grant Gobsen and Felicity Chiang. This, in turn, suggests that "the anti-corruption movement is not yet over and will likely continue to weaken Macau's VIP market for a considerable period of time," Gobsen and Chiang wrote.
Xinhua's late September report that China would end its anti-corruption movement within the ruling Communist Party led some investors to believe the crackdown on corruption was over. However, Wells Fargo Securities had already warned at the time that the anti-corruption movement could rise in the near term. 카지노사이트
A Monday note from Union Gaming added: "The greater allocation of personnel to this [new anti-corruption office] indicates that the number of cases being prosecuted may continue to rise. This, in turn, could delay VIP recovery in Macau (in terms of the number of prosecutions or the status of the person being prosecuted) or build another bridge with respect to VIP trends if prosecutions rise substantially, which could lower the broader group of VIP customers."
Recent reports suggest that the crackdown on corruption in mainland China is likely to be a major contributor to Macau's decline in gross gaming revenue (GGR) since June, due to the gloomy impact on VIP gambling demand. In October, when official figures are released on Tuesday, Macau's GGR could be down 21% year-on-year, several investment analysts suggest.
Union Gaming analysts say the beneficiaries of the anti-corruption movement in mainland China will be other regional jurisdictions, particularly Cambodia, the Philippines and South Korea.
