Macau casinos still booming despite US-China trade war
MACAU The trade war may have sent ripples of uncertainty through the world's second largest economy, but one corner of China has so far remained steadfastly buoyant - the gambling enclave of Macau.
In the past few weeks, Macau's four casino giants - SJM, Sands China, Galaxy Entertainment and Wynn - have all reported a bumper year of gaming revenues and profits.
Mr Chen Jinjun, a 46-year-old garage owner from eastern Zhejiang province, said he has little interest in seeing much of the former Portuguese colony during his five-day visit.
"I mainly come for playing at the casinos, not sightseeing," he told AFP, saying he expects to drop around 50,000 yuan (S$10,100).
"Apart from food and hotel, the rest will all be for gambling. And if I win some money, then I'll buy some luxuries like handbags and clothes."
Players like Mr Chen are the oil that keep Macau's economic engine ticking - even in the midst of a trade war.
"The Macau market actually had a very good 2018," said Mr Grant Govertsen, an expert on the industry at Union Gaming.
There was once a time when the casino giants paid little attention to the mass-market players like Mr Chen. Instead, they courted the VIPs and high rollers to fill their coffers.
But a corruption crackdown by Chinese President Xi Jinping saw a dramatic decline in VIP fortunes from 2014 as wealthy mainland gamblers - many of them officials with suitcases of illicit cash - tried to avoid attracting attention.
The VIP market has returned in the past two years although analysts noted a drying up in the latter half of last year as the trade war bit.
But the mass-market gamblers keep coming and up until January, Macau reported 29 consecutive months of gaming revenue growth.
Mr Ben Lee, a managing partner at IGamiX, a gaming consultancy in Macau, said casinos in the city may have hit "the peak of this current cycle".
All eyes, he said, will be focused on whether the US and China can find a way to avoid a new round of tariffs in their ongoing trade talks.
"If the second tier of tariffs come in, that will increase the magnitude of impact on the industry, particularly in the VIP segment," he said.
Mr Govertsen was more optimistic.
"We still maintain a somewhat bullish outlook and expect the market to grow in the mid-single digits, which includes high single-digit mass growth and flattish VIP," he said.
The city said 35.8 million people visited last year, up 10 per cent on the year before, fuelled by the opening of a massive sea bridge linking Macau to Zhuhai and Hong Kong.
The figures show Macau is still overwhelmingly reliant on visitors from Hong Kong and the mainland, who made up 32.6 million arrivals. - AFP