Macau Casino Revenues Complete 2 Years of DeclineJune 1, 2016 10:47 am
Macau’s casinos generated $2.3 billion in May, down by 9.6% compared to the same month in 2015, and marking two years of falling revenues for China’s only legal gambling resort. The figures released on Wednesday by Macau’s Gaming Inspection and Coordination Bureau (DICJ) were steeper than the 6-7% decline that had been anticipated by industry analysts, and now means that the territory’s combined gross gaming revenues (GGR) for the first five months of the year are currently down by 11.9% compared to the same period of time in 2015.
Macau’s casino industry has been reeling from a slowdown in China’s economy, as well as an anti-corruption campaign launched by the Chinese government in 2012 that has targeted officials and businessmen alike, and resulted in wealthy gamblers steering clear from the island resort. Macau’s government has also been imposing stricter rules on its gambling industry, and as analyst Jamie Soo from Daiwa Capital Markets Hong Kong explains, May’s steeper than expected decline was “partly due to the tightening policies on the industry, especially the recent ban on phone betting.”
Following May’s results being released, Macau’s casino operators suffered extended losses on the Hong Kong-listed stock exchange, including Sands China down by 3.3%, and Galaxy down by 2.5%.
While Macau is heavily reliant on gambling revenues to support its local economy, Beijing has been encouraging the resort to focus more on developing its mass tourism appeal, and this year alone three new mega resorts are expected to open complete with attractions such as a canal Gondola ride placed within The Venetian grounds, or an Eiffel Tower replica located at The Parisian Macao, both of which, according to Sands China CEO Wilfred Wong, are “certain to be a landmark presence on the Cotai Strip, and an iconic addition to the city’s skyline. Commenting on Macau’s future direction, Bernstein Research analyst, Vitaly Umansky, said:
“Long-term, we believe Macau can capitalise on the rising Chinese demand for holiday leisure travel.”