Barclays: December gaming revenue decline due to table reclassification

Gaming analysts at Barclays warned clients that December’s record revenue plunge in Macau, especially for the mass market, should be read with caution and should look beyond President Xi Jinping’s visit here last month.
Barclays says that the reclassification of mass tables to VIP in order to accommodate the new smoking ban played a major role on the slump of revenues in December, more so than the President’s visit or the visa restrictions.
The new rules – introduced on October 6 – only permit smoking in VIP rooms. This led some operators to move some mass premium tables to the high rollers segment in order to retain the smoking-dependent gamblers. ‘We believe the biggest reason for the significant decline is operators’ continued reclassification of tables from mass tables into VIP tables for the potential to allow for smoking (but with no negative impact on EBITDA margins)’, wrote the UK bank in a note to clients. ‘There are now two operators who reclassified most of their premium mass tables into VIP tables, and other operators have been selectively reclassifying certain areas’ tables as VIP tables as well’.
The softness of the mass segment in December was one of the main surprises for investors. The revenues generated by these gamblers dropped 27.6 per cent year-on-year, more than two times November’s (a 13 per cent decline).