Macau casino analysts cut estimates for the year

As revenue declined month after month this year, Macau casino analysts have steadily cut their estimates for how the year will turn out, Bloomberg reported.

In January, they forecast a slight increase in overall casino revenue after the 2.6 percent decline in 2014, the first drop in the city’s history. That estimate kept sliding throughout the year until the median estimate from 12 analysts surveyed by Bloomberg is now for a 32 percent slump.

They have given up on the idea of a second-half recovery, now assuming a $14 billion revenue decline in one year. 

China’s relentless crackdown on graft and the slowing economy have forced high rollers to lay low. Looser travel restrictions on Chinese nationals and a possible easing of a proposed smoking ban might have boosted optimism. That didn’t last long. A yuan devaluation, stock rout, government clampdown on money flows and the latest scandal of alleged fraud committed by a junket operator employee added concerns to the hard-luck industry.

The scandal “gives an additional reason to dislike the overall Macau gaming space because of the potential overhang,” said Richard Huang, an analyst at Nomura Holdings Inc. 

“I’m not optimistic about the future of the VIP business.” Huang forecast a 31 percent decline this year and a 5 percent growth in 2016.

Gross gaming revenue could fall to about $30 billion this year, $14 billion shy of the $44 billion posted in 2014.