Macau Casino Revenues Fall 36.2% To $2.2bn In June

In June 2014, Macau’s casino revenues suffered their first contraction in five years as gaming revenues dipped by 3.7% to $3.4 billion. The island resort’s revenues have been falling ever since, and one year later the Macau Gaming Inspection and Coordination Bureau’s latest results make further grim reading, too, with revenues dropping by 36.2% to $2.2 billion year-over-year. Furthermore, that figure represents the smallest monthly casino tally since November 2010, as China’s ailing economy and corruption crackdown continues to take a toll on Macau’s gambling industry.
There were a couple of positives signs for the future, however, as the Macau government has subsequently loosened its transit visa policy, with mainland Chinese visitors now allowed to visit the island more frequently, whilst staying on the island for a longer period of time. In addition, June’s 36.2% contraction in growth was slightly less than the 38.3% fall predicted by many analysts, and as JPMorgan Chase & Co analyst DS Kim explains:
“[The data] was very bad, but at least not worse than feared. Along with visa relaxation, this news should help improve the sentiment on the sector.”
There is also hope that future casino expansion may help to stimulate further growth in casino revenues, although last month Galaxy Entertainment Group Ltd said its newest casino had returned weaker revenues than originally anticipated. Nevertheless, later this year Melco Crown Entertainment Ltd will also open a new integrated casino resort called Studio City, complete with the highest Ferris wheel in the whole of Asia, and as Bloomberg analyst Tim Craighead explains:
“We still hope that the combination of Galaxy Phase 2 and Studio City can be enough of a draw to catalyze a turn, along with other factors, later this year and into next.”