HAVE THEY OR HAVEN’T THEY?

Once again, rumors of a visa loosening have surfaced. We’ve gotten conflicting opinions from our myriad of sources in Macau. The majority, however, believe that there has been no real change in visa policy for the masses. As we pointed out in our 12/21/08 post “MACAU VISAS: NO MAJOR CHANGES”, Beijing has allowed casinos to target certain direct customers for frequent visitation, but not on a mass basis. This could be causing a lot of the confusion.

Our contacts did indicate a busy New Year’s (western) celebration in Macau. Some of that was due to a big bash at MGM Grand. However, most of the incremental visitors appeared to be from Hong Kong and not mainland China.

We continue to believe that real change in the visa situation may not occur until late 2009, when the new Macau Chief Executive is getting ready to take over. In the meantime, the bigger issue is the lack of credit available to players, especially relative to 1H 2008 when the junkets flooded the market. Visa changes primarily impact the mass market business. As can be seen in the following chart, the Rolling Chip business suffered significantly more than mass market in the back half of 2008.

Lack of credit a bigger issue than visa restrictions as evidenced by the underperformance of RC

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