Macau Casinos Mark 17 Months of Decline in October 2015November 2, 2015 1:06 pm
The Macau’s Gaming Inspection and Coordination Bureau has released its latest figures for October 2015, and the results were once again disappointing, with revenues plunging by 28.4% to $2.51 billion compared to the same month in 2014. The decline comes despite last month seeing the opening of the $3.2 billion Studio City resort, as well as including the seven-day “Golden Week” National Day holiday from October 1st to 7th, which saw Chinese visitors increase by 7.1% from a year earlier.
China’s only legal gambling resort has now failed to return any revenues growth since May 2014, marking seventeen straight months of decline for Macau. Without a doubt, the biggest factor in Macau’s decline has been the anti-corruption campaign instigated by the Chinese government, which has resulted in VIP high rollers staying away from the gambling mecca. Another factor is the recent smoking ban on the casino floor for mass market players, outside of specially designated smoking lounges, a situation that could be further exasperated should the ban be eventually extended to VIP players.
Nevertheless, despite Macau’s double-digit market contraction in October, revenues were still roughly in line with analysts expectations. Furthermore, October’s results marked the first time since January that year-on-year declines were under 30%, which was been hailed as a positive sign by observers, who are currently predicting the sharp downward trend to trail off by next year. As a result, while this year’s revenues are expected to contract by 35%, by next year that figure should drop to just 8%, with Nomura analyst Richard Huang commenting:
“Macau is not out of the woods yet, especially VIP gaming, as we expect Macau to experience three consecutive years of falling gross gaming revenue.”
Throughout October, Macau casino operators also experienced a rally in their share prices, with Melco Crown stocks soaring 36.1%, Galaxy Entertainment jumping 35.3%, MGM China rallying 26.6%, Wynn Macau rising 22.1%, and Sands China gaining 20.8%.