Macau Casino Revenues Fall 33% To $2.1bn In SeptemberOctober 2, 2015 12:24 pm
Macau’s Gaming Inspection and Coordination Bureau has released its latest results for China’s only legal gambling resort, revealing a 33% drop in revenues to $2.1 billion in September, compared to the $3.21 million generated for the same last year. Back then, the enclave had just experienced four months of consecutive monthly declines, but that total has now been stretched out to 16 months, with no apparent end to the ongoing trend in sight.
One of the main reasons for Macau’s ailing fortunes is China’s anti-corruption campaign, which has frightened off many of the VIP gamblers the resort so heavily relied upon. As brokerage firm Bernstein Research explains:
“Greater scrutiny of junkets may weigh further on Macau’s VIP business. We believe this will likely intensify the consolidation that is already taking place in the junket sector and junket promoters may face incremental difficulty in raising capital.”
One piece of positive news on the horizon, however, is a recent pledge by the Chinese central government to “support Macau’s economy in all aspects”, a plan which may also include an expansion of Macau’s maritime industry. As well as boosting shipping, this may also give a dual boost to Macau’s tourism market, and help visitation by casual gamblers, who are increasingly being seen as the main pillar of the gambling industry.
This positive expectation, as well as September’s revenue results being largely in line with estimates, was subsequently reflected in Macau casino shares, which soared on the Hong Kong market. Shares in Galaxy Entertainment Group jumped by 10%, Wynn Macau Ltd rose by 7.4%, with further gains also noted by SJM Holdings (8.6%), Sands China jumped (7.7%), and MGM China Holdings Ltd (6%).
In the meantime, gambling operators continue to invest heavily in the Macau market, with a number of major casino projects planned for the future, including the $1.4 billion Macau Studio City expected to open next month. Next year should also see the opening of the $2.7 billion Parisian resort, the $4.1 billion Wynn Palace, and the $2.9 billion MGM Cotai.