In a note dated March 7, VIP volume was estimated by Credit Suisse to be down nearly 10% year-over-year in the fourth quarter while volumes for non-VIP gamers rose just 1%. Tourist numbers to Macau have held up, but it appears that people are gambling less.
The bank says now is the time to reduce exposure to the Macau gaming sector. Its coverage group includes Sands China, Galaxy, MGM China and Wynn Macau.
Other analysts have also cited risks to the space. "Despite November revenue better than expected...our lower estimates are driven by weaker VIP and premium demand amid heightened risk to macroeconomic outlook in China," UBS analyst Robin Farley said, according to Barron's.
At the same time, the Chinese government is also seeking to reduce debt levels in the economy, indicating credit growth may slow or even decline, providing less funds for discretionary purchases. Chinese household debt has soared in recent years , with credit cards fueling much of the growth.
Aggregate Chinese credit-card balances have surpassed those of the US and are now approaching $1 trillion.