Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
While China's economy is sputtering and its stock market is lagging the exuberance of the rest of the world's largest centrally-planned economies, it seems life is good for the richest of the rich. In Macau, "the VIP market is gaining momentum," with the industry’s April revenue the second-highest in history. About two-thirds of Macau’s casino revenue comes from high rollers who gamble on credit due to restrictions on taking cash out of China but as Bloomberg reports, last year, the big bettors pulled back across the industry amid speculation that China’s new government might restrict junkets and curb cash flowing from the mainland into Macau.
With the political transition completed, the VIP business is back to normalcy – as evidenced by Sky 32, an elite oasis of luxury on the 32nd floor of the Galaxy Macau casino, offers commanding views, a waterfall, a bar with vintage single malt whiskeys – and six sumptuous rooms where players must commit to betting at least 10 million yuan ($1.6 million).
Just a few months ago, even over-the-top pampering like that available in Sky 32 wasn’t enough to attract big bettors from China, as many steered clear of Macau, the world’s top-grossing gambling hub.
Now, the high-rollers are coming back to Macau, which raked in $38 billion in revenue last year, more than six times that of the Las Vegas strip.
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“The VIP market is gaining momentum,” said Robert Drake, chief financial officer of Galaxy Entertainment Group Ltd, which owns Galaxy Macau. The industry’s April revenue “was second-highest in history. We are off to a great start for the year.”
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About two-thirds of Macau’s casino revenue comes from high rollers who gamble on credit due to restrictions on taking cash out of China. These people are often brought in by junket operators…
Last year, the big bettors pulled back across the industry amid speculation that China’s new government might restrict junkets and curb cash flowing from the mainland into Macau.
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“We have not seen any evidence of a crackdown, it’s purely noise,” said Union Gaming Group analyst Grant Govertsen. “VIP business is picking up nicely.”
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VIP revenue in Macau tends to closely track sales of luxury goods, which slowed in the second half of last year, probably related to the government transition
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“Now the transition is completed, VIP business has come back to normalcy.”
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“VIP business will continue to be solid, although it may not be growing as fast as the mass market,” said MGM China CEO Bowie. “In absolute terms, the VIP business is huge.”
