Macau Casino Revenue Slows To Mere 1.5% In July

China’s only gambling resort Macau has released its financial results for July revealing a meager 1.5% rise in revenue to 24.58 billion patacas (US$3.08bn). Despite being the slowest rate since 2009, the figure was still ahead of analyst predictions of 1%, while revenue also exceeded the 23.3 billion patacas ($2.92bn) generated in June.
The former Portuguese colony had been enjoying double-digit growth over the past few years, with gaming revenue hitting $33.5 billion in 2011, up 42% on its 2010 figure. This year, however, forecasts have already been revised downwards several times, and as Union Gaming analyst Grant Govertsen explains:
“All in, we are expecting third-quarter gross gaming revenue growth in the mid-single-digits. Looking further out, we expect full-year 2012 GGR growth to reach the teens.”
Adding to a reduction in Macau’s growth is a slowdown in the Chinese economy, which has impacted the country’s mega-rich VIP gamblers, who provide around 70% of Macau’s gambling revenue. In addition, there are signs these high-end gamblers, known as whales, may be returning to Las Vegas for their gambling kicks, with Wynn Resorts reporting a 7% increase in its table game markers issued to non-US players in Q2.
The reason for the whales’ migration includes a variety of factors, which may include junket operators who arrange trips and credit for gamblers visiting Macau but can be heavy handed when it comes to collecting their outstanding debts. As Macau-based political analyst Larry So comments:
“They keep your travel documents, passport or ID until you pay them. They essentially hold you in custody. If you don’t pay, they will ask your relatives and friends to come and pay.”
Another factor in July’s lackluster growth was also the severe tropical storm “Typhoon Vicente,” which disrupted ferry and transport services for over 24 hours during the third week of the month.  Macau has now recorded just one double-digit month out of the last three.