The best days for the largest gaming market in the world, Macau, may be behind it, as weakness in the high-roller sector spreads to the mass market, according to Gary Pinge, analyst at Macquarie Securities, who cut his estimates for the industry earlier this week.
"I think the days of 40 percent growth are probably behind us," Pinge, who is based in Hong Kong told CNBC.
Pinge points out that the nearest province of Guangdong already accounts for 55 percent of mainland Chinese visitors to Macau, whereas Hong Kong visitors account for 40 percent of total visitors in the biggest casinos. The “low hanging fruit have been picked,” Pinge said.
In a report to clients, Pinge cut his 2012 revenue growth forecast for Macau's gaming industry to 13 percent from 15 percent. The figures are a far cry from the 58 percent growth seen by the industry in 2010 and 42 percent expansion in 2011.
Most of the slowdown in Macau - which overtook Las Vegas as the world's No.1 gaming destination by revenue back in 2006 - will come from the high-roller or VIP segment, which contributes about 70 percent of Macau's revenue. Those high spenders have been pulling back since the middle of last year because of slowing growth and a credit crunch in China.
The VIP segment will probably grow just 10 percent this year, far slower than the 44 percent growth last year and a 70 percent expansion in 2010, Pinge wrote in the report.Page 1 of 4 | Next Page