Macau Casinos Report Slowest Growth In 15 Months

The Macau Gaming Inspection and Coordination Bureau has released its casino gambling figures for January, revealing a single-digit growth in revenue of just +7% to $3.6 billion. The figure represents Macau’s lowest level since October, 2012, and was far below analyst estimates of up to 15% for January.
Being blamed for Macau’s lackluster January results is a slowing Chinese economy, which grew by just 7.7% in the fourth quarter, as well as slowing demand coming from Macau’s high-roller, or VIPs, sector. However, each year gambling demand is regularly subdued ahead of the Chinese New Year holiday, which this year started on January 31st, and last January the world’s casino capital also produced the slowest year-on-year growth of +7.3%, followed by the second-lowest increase of +11.5% in February.
“This effect was probably exacerbated this year as the heavily family oriented days leading up to the Chinese New Year fell at the very end of January and likely brought VIP to a standstill,” explained Grant Govertsen, a Macau-based analyst at Union Gaming Group.
Nevertheless, Macau’s January results sent stocks of many gaming companies lower, with shares in Sands China Ltd trading down by 7.5%, the most dramatic one day fall since October 2011. The story was also mirrored in the U.S., where casino operators with major exposure to the Macau casino market likewise took a hit, including  Melco Crown Entertainment Ltd. down 4.5%, Wynn Resorts Ltd. down 2.6%, MGM Resorts International down 2%, and Las Vegas Sands down 1.3%.
Overall, Macau’s gambling revenues increased by 19% to $45.2 billion for the whole of 2013, which is around 7-times the revenues generated on the Las Vegas strip over the same period. Furthermore, the whole of Nevada generated $11.14 billion in total gaming revenue for the year, the state’s best annual tally since 2008, but still roughly a quarter the total that Macau enjoyed.