Macau Downturn Severe Says Crown Resorts Owner James Packer

Macau Downturn Severe Says Crown Resorts Owner James PackerIn April, Macau’s casino revenues plunged 39% to $2.42 billion, representing 11 consecutive months of negative growth for China’s only legal gambling resort. The worrying situation follows years of unprecedented expansion for Macau’s gambling industry, making this recent downturn all the more troubling for the major casino operators who have 35 venues spread out across the island of 636,200 people.
One businessman feeling the pinch is Australian billionaire James Packer, the chairman of Crown Resorts, which holds a 34% stake in Melco Crown which in turn generates 50% of revenues for Crown Resorts from its casinos in Macau. In fact, Melco Crown is currently in the process of constructing a fifth casino hotel in the City of Dreams along the Cotai Strip, but a crackdown on money laundering and corruption now threatens to dampen James Packer’s Macau ambitions as the bottom appears to have now fallen out of the lucrative high-roller market.
Other factors contributing to a downturn in Macau’s gambling industry includes a casino smoking ban, visa restrictions, and a generally weaker Asian economy. The Chinese government is also keen to see Macau turn away from its gambling based economy and become a more family-oriented tourist resort. As a result, James Packer and Melco International Development Limited CEO Lawrence Ho are anxiously hoping Macau’s gaming regulator will grant their new project at least the 400 gaming tables it needs to be profitable. As James Packer explains:
“I don’t think any of the operators could have predicted what has happened now. As an Australian investor in China and Macau, it’s very hard to be critical of a corruption crackdown [but] when and how that ends is something that no one knows.”
Looking ahead, however, James Packer highlighted the fact Macau’s been a highly lucrative venture to date, and that he was optimistic about the resorts long-term future.
“I think we’ve all got to be mindful of the fact that it’s been a terrific ride so far, and nothing is a straight line up,” explained the 47 year-old billionaire.

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