VIP as a percentage of casino revenues in Macau is expected to go down to as low as 34% by 2022 as the mass market becomes more dominant, according to estimates from Bernstein Research analysts.
In 2011, around 70% of gross revenues (including non-gaming) came from the VIP segment. However, this figure fell to only 41% in 2018. Bernstein said this is due to the structural growth of the mass market, which is less affected by luck, liquidity, and policy changes from mainland China.
“VIP every month/quarter is oftentimes dependent on the behavior and luck of a relatively small number of high rollers and driven much more by liquidity in China (i.e. flow of credit) and liquidity in Macau (in the junket system),” it said.
“While Mass has had some impact from policies (i.e. the smoking ban that had an outsized impact on Mass GGR decline in 2015), the policy impacts on Mass have not had as extreme an impact on this segment as on VIP.”
Bernstein said the more stable contribution from mass will continue to dwarf VIP, causing investor attention to continue to shift away from VIP. (AGB)