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Mixed Projections for the Casino Industry

There are a range of opinions amongst gaming analysts over the future of gambling in Las Vegas and Macau.

Recent reports from gaming analysts have shown a wide range of opinions over the future of the casino industry.

One market research group, Five Star Equities, released a review last week which suggested that the whole casino industry is facing a slowdown, both in Las Vegas and Macau. The group noted that despite beginning well this year, revenues in Macau and Vegas have slowed over recent months.

The review drew attention to the June revenue report from the Nevada Gaming Control Board which saw a 4.5% decline. This was the third decline in a row in slot volume on the Las Vegas Strip.

Grant Govertsen, an analyst for Union Gaming based in Macau, said that he believes gaming revenues in Macau will drop to the low single digit area in August but should rise back to double digits in September.

This is reflected in the past few days of trading which has seen a rise in share prices of casino companies in Macau. Nomura Securities said that gaming revenues in Macau have risen by 5% to 11% since the beginning of this month. These figures are far above previous projections and can be explained by a surge in customers.

The analysts at Sterne Agee agree with these projections, they told investors that gross gaming revenue in Macau should rise 9% year-over-year this month. The results are expected to set a gambling record for Macau.

However, some people are being more cautious. An analyst at UBS Securities, Robin Farley, has changed her estimate of growth in Macau for this year down from 13% to 7%. She explained that this is because she expects fewer VIP visitors to the casinos.

Over all it seems that tough times are ahead for the gambling industry, but there is not yet a reason to give up on it.

OCA News Editor