Japanese brokerage Nomura is halving its year-on-year growth estimate for Macau’s VIP gross gaming revenue (GGR) in 2019, to 7 percent from 14 percent previously, citing “recent flattening of volume growth from junkets”.

It is also revising downward its overall Macau GGR growth forecast through to the year 2020 to 9 percent, from 14 percent, to “reflect a more sustainable mid-single digit increase in VIP demand and low-double digit mass growth”.

The brokerage’s latest forecast for 2018′s VIP revenue tally is US$21.20 billion, which would be a rise of 13 percent year-on-year.

The revised 2019-2020 outlook was informed by “conversations” with casino executives, Nomura analysts Harry Curtis, Daniel Adam and Brian Dobson wrote in the Monday note.

A number of investment analysts had previously mentioned some easing in demand for Macau gambling during June and July, that had been attributed in part to the 2018 FIFA World Cup, an international soccer tournament in Russia, being held from mid-June to mid-July.

A major Macau junket firm, Tak Chun Group, told GGRAsia on Monday that the World Cup – an event held every four years – had had a “slight impact” on the firm’s business, but that was “normal” relative to the impact of previous editions of the tournament.

Nomura cited in its assessment on Macau gambling demand, several macro-level factors, including a trade tariff stand-off between the United States and China. “Geopolitical uncertainty in China is high due not just to the brewing trade war, but also because of Beijing’s efforts to rein in excessive company leverage. On the downside, if last week’s imposition of a US$34-billion bilateral tariff [between China and US] increases toward US$100 billion, then we’d expect economic (and junket) activity to contract further,” the Nomura analysts stated.

Geopolitical risks related to Macau’s exposure to the possible fallout from any U.S.-China trade war was a subject mentioned in the latest business risk assessment from Hong Kong-based consultancy Steve Vickers and Associates Ltd.

“… this near-term lull in VIP volume growth could improve if there is a face saving trade agreement between China and Trump, and if China pumps more liquidity into its system to prop up its GDP,” the Nomura analysts wrote in the Monday note.

The Japanese brokerage however expected “at least mid-single digit growth” in Macau’s VIP volumes through 2020, supported by a possible increased junket demand from “high quality capacity growth” brought by Wynn Palace and Galaxy Macau resort.

“The opening of MGM’s Mansion in November 2018E should continue this trend. Our revised 7 percent growth forecast for VIP assumes that MGM gains traction with the ‘Big Three’ junkets, as well as low-single same-store growth for Las Vegas Sands and Melco Resorts and Entertainment Ltd,” Nomura noted.

In the Monday note, Nomura noted that it had also changed its forecast for Macau names’ mass segment growth for 2019 from 14 percent to 12 percent, due to the “overlap between the premium mass and VIP customer bases”. The brokerage’s forecast for Macau’s mass revenue will increase by 16 percent to US$14.73 billion for this year.