Macau Casino's Revenues in June Lowest Since 2010July 6, 2016 9:52 am
In June 2016, Macau’s casino industry suffered an 8.5% fall in revenues compared to the same month last year, according to Macau’s Gaming Inspection and Coordination Bureau. Furthermore, the $1.99 billion generated by the territory’s 36 casinos was the lowest amount since September 2010, and marked 25th straight months of decline for China’s only legal gambling resort.
Nevertheless, the decline was still ‘slightly better’ than the 11% revenue drop predicted by firms such as Bernstein, with expectation now being that business will improve in H2 2016 due to ‘improvements in transportation infrastructure and the opening of large-scale integrated resorts between 2015 and 2018’.
The island of Macau receives around 80% of its revenues from its casino industry, and with business continuing to fall the venues have increasingly been turning to non-gaming services to improve their revenues. Despite their efforts, though, gambling still represents roughly 90% of the casinos’s business, a figure that is more than double that of the world’s second largest resort, Las Vegas.
On a more positive note, Macau has successfully managed to improve its mass market appeal, and in the first half of 2016 the sector represented 53.1% of the overall market, up by 10% compared to H1 of 2015. Meanwhile, the VIP market continues to shrink in comparison, and in H1 fell to just 17.3% of revenues. The improvement was subsequently noted in a recent government report which encouraged casinos to continue adding to their non-gaming tourist sector in order to provide a sustainable model for the city’s gaming industry, as well as move Macau further on to becoming a world center of tourism.
Finally, Macau casino stocks are currently down by 17% from their spring highs, but some analysts are predicting a summer rally, with Karen Tang of Deutsche Bank AG stating: “In both of the last two years, Macau stocks had short-term summer rallies in July-August as GGR picked up over the summer holiday.”