Macau Casino Revenues Fall To Record Low In OctoberNovember 4, 2014 1:26 pm
As the Chinese government continues its anti-corruption drive, Macau’s 35 casinos continue to be rocked by fewer tourists and wealthy Chinese gamblers who have now become wary about publicly gambling in the country’s only legal gaming haven.
Up until recently, Macau had enjoyed five years of rapid growth but by June this year the resort experienced its first downturn in business after revenues fell by -3.7% to $3.4 billion. That downward trend has continued through July (-3.6%), August (-6.1%), September (-11.7%), and now October, which posted a dramatic -23.2% fall in growth to $3.5 billion, beating Macau’s previous biggest fall of 17.1% in January 2009.
October’s result represents Macau’s worst monthly revenue performance to date, a worrying trend in a special administrative region which derives 80% of its income from casino revenues. Adding to Macau’s recent malaise has been slowing economic growth, combined with tighter visa regulations limiting the amount of time “mass market” gamblers can spend in Macau. In addition, China’s strict currency regulations, curbs on a number of popular credit cards, and casino floor smoking ban have all had an impact on the casinos’ revenues.
In spite of five months of gloomy figures coming from Macau, however, a number of US casino moguls have expressed optimism over the future of the world’s biggest gambling hub, with Steve Wynn, chief executive of Wynn Macau Ltd, commenting:
“It is worse in October than it was before October. I don’t know if it is a squall or if we are in the rainy season, or how long it will last, but we are still very bullish on Macau.”
Steve Wynn’s optimism was also shared by Las Vegas Sands Corp and Sands China Ltd CEO Sheldon Adelson, who said:
“It is only a matter of time before the cycle reverses itself. No one has ever suggested that the behavior of Chinese and Asian people, which has been established over a 3,000-year history, is going to change.”
Nevertheless, analysts are now expecting Macau gambling revenue to keep contracting until mid-2015, at which time a number of high profile new properties are scheduled to open in the resort.