Macau’s casino outlook for 2018 appears quite promising. The Las Vegas of the East is poised for a profit surge towards record highs by next year. This is in stark contrast to the last three years, where the Chinese government’s restrictions on world’s largest gambling den sent their profits on a freefall of sorts.
 The restrictions were well-intentioned enough. China was looking to crackdown on corruption turned its focus on Macau’s casinos to ensure that high-rollers evading taxes and racketeers engaging in money laundering activities were brought to task. This crackdown caused Macau’s casino industry to plummet as over $100 billion dollars were lost during this time period.  The anti-crackdown campaign slowed down towards the end of 2016 and that corresponded with Macau’s casinos beginning their recovery.
The casino industry has now had more than 12 months of consecutive revenue growth and gaming analysts estimate that industry earnings could once again surge or even approach new record highs in 2018.
Market Analysts Predict Positive 2018 But Remain Cautious  
Even though profits have stabilized enough to allow for this new windfall of profits, any new and unexpected policy changes from Beijing could mitigate this expected growth. A Bloomberg survey based on research from 10 market analysts predict that the average gaming revenue will increase by 14 percent in 2018.
What’s the biggest catalyst and driver for this upward tick? VIP gamers. There’s also a torrent of leisure tourists that are expected to pour in by the droves as Cotai opens up new attractions and casinos.
The local unit of MGM Resorts International is also in the process of completing its $3.5 billion MGM Cotai facility which is expected to open by the end of Jan 2018. The construction of The Grand Lisboa Palace by Hong Kong developer SJM Holdings Ltd. is already underway and could open towards the end of 2018 or early 2019.
Macau Casinos Investing Heavily To Upgrade And Expand
The Cotai district has seen a number of new casinos and entertainment facilities open up in the last couple of years. The Parisian Macao and the Wynn Palace are two multi-billion dollar facilities that have a large number of non-gaming offerings which have attracted thousands of tourists in recent times.
The six major casino operators in Macau are investing heavily into upgrading and expanding their casino resorts. They are investing heavily in fancy spas and European-themed resorts, which are expected to increase profits even more in 2018 as operators look attract the mainstream market of gamblers. The rise of leisure tourism is expected to offer higher profit margins for investors because they don’t require expensive perks like discounted hotel rooms or private jets.
According to Deutsche Bank AG, an estimated 7 percent increase in the number of visitors to Cotai will come about in 2018. In light of this, Macau casino stocks went up this week and a number of casino stocks surged towards previous highs they’ve achieved back in 2014, prior to the anti-corruption crackdown.
Latecomers To Cotai Will Face Stiff Competition
Sands China and Wynn Resorts Macau opened their multi-billion dollar properties in 2016 and have already capitalized on the lucrative Cotai district. SJM and MGM have been late to get the ball rolling and Jamie Soo, the Daiwa Capital Markets Hong Kong Ltd analyst believes that the late entry could hurt their profit margins as they will face stiff competition from casino operators who have already established operations in the region.
SJM will be the last entrant into the Cotai district. The company has faced significant market losses in recent years and could continue to witness a downward spiral in 2018. MGM is also late to the party but is confident that its new casino will be a major hit with the public as it brings a number of unique attractions including the world’s biggest chocolate fountains, a 2,000-seat theater, and 1,400 hotel rooms.
Sands, Galaxy, Wynn Macau, and Melco Resorts & Entertainment have already established themselves in Cotai and are likely to remain in a stable position as far as their market share is concerned. Based on Bloomberg’s compiled analyst data, these industry leaders are expected to see a surge by 11 percent in terms of adjusted Ebitda or their earnings prior to amortization, depreciation, tax, and interest.

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