Hopes abound that mom-and-pop gamblers will sweep into Macau and save the day after the enclave's gaming revenue tumbled in October, but it isn't clear they can replace the VIP players who are staying away in droves.
"[They're] low-end gamers, but they do spend on hotels and other ancillary nongaming type of activity and that's been a growth sector," Jonathan Galaviz, a partner at consultancy Global Market Advisors, told CNBC. "Companies that really have a good strategy to look at the middle class [or] middle market will do well."
Gambling revenue in October tumbled 23 percent on-year, the fifth consecutive month of declines and the sharpest drop since record-keeping started.
"I lay [the blame] squarely at the door of the anti-corruption drive in China," said John Bruce, a director of operations for Macau at Hill & Associates. "This anti-corruption drive has not just kept corrupt figures out of Macau. It's kept any high-profile person out of Macau, because nobody wants to be the subject of an investigation in China, innocent or not."
But he noted that while VIPs are staying away, some operators are seeing strong pickups in mass-market gamblers, with MGM's mass-market up more than 30 percent in the third quarter.
"Mass market as a whole is performing very well still," he said, adding that he believes the gaming revenue is near a bottom, with a recovery likely early next year. Bruce noted that casinos tend to get higher margins on mass-market gamblers as mom-and-pop players tend to be "less skillful" and the casinos don't have to pay junket commissions.