Macau Casinos Down 2.6% To $44.1bn In 2014January 2, 2015 10:48 am
Following several years of explosive growth, results coming out of the world’s biggest casino resort in 2014 were severely affected by a clampdown on money laundering and corruption by the Chinese government. Consequently, last year the Chinese gambling resort of Macau experienced its first ever decline in annual revenues since the casino industry was first liberalized in 2001.
The wheel began to fall off Macau’s casino industry back in June after revenues from the island’s 35 casinos fell for the first time in 5 years, and by December a record 30.4% contraction in business resulted in a worrying seven consecutive months of falling revenues for Macau. Overall, Macau’s casino industry generated $44.1 billion in 2014, representing a 2.6% decline compared to the previous year.
It would also appear Macau’s troubles are not about to go away anytime soon, either, and while some analysts have optimistically predicted new project developments in Macau will help drive volume growth in 2015, other analysts are not so sure. One such analyst predicting a further contractions in the market throughout this year is Philip Tulk from Standard Chartered Plc, who explains:
“The VIP heyday is over. The anti-corruption crackdown doesn’t look to be a short-term phenomenon.. Unless the top end recovers, the new capacity isn’t going to drive gross gaming revenue significantly positively.”
In fact, President Xi Jinping’s anti-corruption and anti-extravagance campaign has acted as a major deterrent in dissuading high-rollers from visiting Macau’s casinos, and over the past six months a total of $58 billion has been wiped off the casinos’ market value. The disappointing results subsequently impacted company shares on the Hong Kong stock exchange (Hang Seng), with stocks in Macau’s six biggest casino operators plummeting by an average of 40% last year.
Despite Macau enjoying the title of the world’s largest gambling hub with revenues seven times that of Las Vegas, the government has been strongly pushing the island to diversify away from just gambling and concentrate more on developing a more complete tourist sector.