Overseas VIP gaming revenue in Macau increased 27 per cent from the same time last year after two years of negative growth, reports Asia Gaming Brief.

Morgan Stanley said that part of this was driven by new casinos in Saipan in the Marianas, and Vladivostok, Russia, and in part from junkets moving to low tax jurisdictions like the Philippines.

The brokerage said: “Macau VIP revenue on the other hand fell 21 per cent year-on-year in the second quarter,” adding that it saw “no recovery in sight. No new VIP tables have been allocated to newer casinos since 2015 and the smoking ban could be implemented in future.”

Earlier this year, the brokerage highlighted that 2016 will remain challenging for operators, forecasting that growth outside Macau will outpace the region. It added that the slowing of China’s macro-economic growth, evident in China’s M2 (a key economic indicator) and real estate sales growth, signals further risk to VIP demand.

Morgan Stanley said it had high hopes for Australia-listed Star Entertainment stock, which continues to benefit the most from VIP exposure over rival Crown Resorts. The Star casino enjoys a monopoly position in Sydney. “The Star’s ability to manage new VIP market entrants still remains the biggest stock specific risk and longer term value driver, though this is not expected until 2021,” it said.

Source: Asia Gaming Brief