Macau Casino Revenues Up Just 3.1% in January

The world’s largest gambling resort of Macau, an island located on China’s south coast, generated $2.4 billion in casino revenues last month, marking a 3.1% improvement over January 2016’s tally of $2.33 billion.
While the latest revenue results released by the city’s Gaming Inspection and Coordination Bureau extended Macau’s winning streak to six consecutive months, the low single-figure growth was still well below the between 7% and 10% increase originally predicted by analysts.
Admittedly, part of the reason was that this year’s week-long Chinese New Year celebrations started at the end off the month on the 28th. Nevertheless, concerns still exist over the state of the Chinese economy, as well as the ongoing anti-corruption campaign being waged by the government. As a result, the high-stakes gambling segment was weaker than expected during the start of the Chinese New Year holiday, and as Richard Huang, an analyst at Nomura Holdings Inc, explains:
“It is fair to say that some analysts and investors got too excited about the VIP segment, and the V-shape recovery in VIP demand is not coming through.”
In August 2016, Macau broke a 26 month losing streak after posting a 1.1% increase in revenues. Since then, revenues have grown each month, including during the month’s of September (7.4%), October (3.2%), November (14.4%), December (18.5%), and now January 2017 (3.1%). Commenting on six straight months of growth, Michael Ting, a CIMB Group Holdings analyst, stated that while the worst appeared to be over, the gambling resort’s recovery was likely to “be quite volatile and choppy.”
Meanwhile, casino shares were negatively affected by the latest revenue results, with Melco Crown Entertainment sliding 3.6%, Wynn Resorts Ltd down 2.9%, Las Vegas Sands Corp lower by 1.7%, and MGM Resorts International falling 0.9%.
Macau’s casino revenues peaked at $45.2 billion in 2013, but in 2014 suffered a 2.6% decline to $44 billion. In 2015, revenues tumbled further by 34% to $28.92 billion, but by 2016 revenues managed to stabilize with just a 3.3% decline to $27.9 billion.