Macau Casino Revenues 3.3% Lower in 2016January 3, 2017 12:14 pm
Macau’s casino industry has ended on a high, after it was revealed that the resort’s gross gaming revenues finished up 8% at $2.48 billion in December, compared to the same month last year. As a result, having experienced a 26 month dry spell dating back to June 2014, China’s only legal gambling destination reported positive growth for the last five months of 2016, according to the statistics released by Macau’s Gaming Inspection and Coordination Bureau.
While Macau’s casino market still ended the whole of 2016 lower by 3.3% at $27.95 billion, its H1 results did help lift a casino market which had been suffering double-digit drops prior to its recent upward bounce. Macau’s 2016 contraction follows a 34.3% decline in 2015, and a 2.6% decline in 2014, although analysts are now predicting a return to growth for the year ahead.
Helping Macau’s recent recover has been the opening of a number of new casinos in the last three months of 2016, which managed to attract mass gamblers and VIP high-rollers alike. 2017 will also see the opening of an ultra-luxury resort in Macau’s Cotai district, called The 13 hotel, while the following year should see the addition of SJM’s Grand Lisboa Palace to Macau’s casino offering.
Commenting on the state of Macau’s casino market going forward, the international ratings agency, Fitch, commented: “Macau gaming, now firmly at the bottom of the cycle, has better long-term prospects given investments in new supply, improvements in mass market indicators and under-penetration of gaming throughout the rest of Asia.”
In the meantime, Bloomberg has gone out on a limb and predicted a 7% increase in revenues by the end of 2017, with the market predominantly being driven by an increase in mass market players. Cameron McKnight from Wells Fargo Securities, on the other hand, has warned against any expectations of a v-shaped recovery like the ones witnessed in 2010 and 2013, with the analyst pointing at lingering questions over policy, as well as challenging macroeconomic factors.