Macau Casino Revenues Shrink 9.5% in AprilMay 3, 2016 12:23 pm
Macau’s casinos generated $2.2 billion in April, representing a 9.5% decrease compared to the same month in 2015. While the latest results from Macau’s Gaming Inspection and Coordination Bureau show that the island resort has now experienced 23 consecutive months of revenue declines, the good news is that April’s contraction in growth was lower than analysts had earlier anticipated.
The latest results follow flat revenues in March, providing the industry with hope that Macau’s gambling market has finally begun to stabilize for the first time since China’s anti-corruption campaign lead to its downturn in mid-2014. Macau’s casinos have since seen their high-roller segment decimated, leading them to implement a five-year plan to focus their venues on attracting mass-market tourists, and recreational gamblers.
The shift towards the mass-market sector now seems to be bearing fruit for companies such as the Galaxy Entertainment Group Ltd., Wynn Macau Ltd. and Melco Crown Entertainment Ltd, which has been reflected in their shares that have been amongst the best performing stocks this year. Shares in Wynn Macau, for instance, are currently up 28.5% in 2016, while MGM China is higher by 12.2%,Galaxy Entertainment up 7%, and Sands China up 4.6%. Commenting on April’s figures, Bloomberg Intelligence analyst Tim Craighead stated:
“The casinos produced another reasonable monthly revenue performance in what is a seasonally slower shoulder month. It still looks to us that the business is stabilizing and the next big catalysts to watch for are the summer travel season and the new resorts from Wynn Macau and Sands China.”
Tim Craighead is referring to two mega-venues scheduled to open later this year in China’s only legal gambling resort, namely the $4.1 billion Wynn Palace complete with an air-conditioned cable ride, and Sands China’s Parisian which will feature a half-sized Eiffel Tower for tourists to visit.
In 2015, Macau casinos generated $28.8 billion in revenues, which was 34% lower that the $43.9 billion it generated for the whole of 2014.