Creates increased buying power for mainlanders
China’s central bank has signaled it may finally allow its currency to appreciate against the dollar, ultimately making the United States and others more competitive with China.
Since the Hong Kong dollar/Macau Pataca are pegged to the U.S. dollar and given that the majority of play in Macau is from mainland Chinese, this change has important positive implications for Macau, according to gaming analysts Union Gaming Group.
"This would be a very positive development for Macau and each of the gaming operators in that market. Essentially any appreciation of China's currency against the U.S. dollar creates buying power for Chinese in Macau where HKD and Patacas are used by VIP and the mass market," Union Gaming said in a research note to investors.
Union Gaming indicated this may mean "players essentially will have more capital (magnitude depends on amount of appreciation over time); losses become more affordable; working capital velocity likely plays a role in these incremental volumes as well; and perhaps limits on hard currency for offshore travel will ease (mass market)."
Chinese currency move may benefit Macau
June 23, 2010