When monthly income in Macau’s casinos began to fall headlines appeared when the decrease in revenue hit the third month. Now, casino revenues have dropped for the sixth consecutive month. Most casino operators in Macau had predicted that the run of bad luck would continue in November and it did when their fears were confirmed by the latest statistics from the Gaming Inspection and Coordination Bureau. When compared to the monthly income in the territory’s casinos in November of last year, there was a 19.6 per cent drop this November. It had been thought that the drop would be 19.3 percent and some analysts even predicted a decrease of up to 21 per cent in income in Macau’s thirty five casinos. The total revenue for all of Macau’s casinos was 3.04 billion dollars.
Several factors can be blamed for the decrease
The sixth month in a row of declining revenue in Macau’s casinos has been put down to several different factors. The main reason put forward is the fact that for quite some time now the authorities in Mainland China have been cracking down on corruption. A large proportion of the high rollers who spend huge amounts in casinos in Macau have been keeping a low profile while the Chinese government carries out its investigations. Many of these VIP players would travel to Macau from China on trips organised by junket operators but these operators are also under the scrutiny of the Chinese authorities. The Chinese economy like most world economies has lost momentum over the past few years and this would also have lead to a smaller number of Mainland Chinese players travelling to casinos in Macau. The Chinese government also cut back on the amount of tourist visas being issued to its nationals to visit Macau. Another possible reason given for the fact that casino revenue has fallen for six months is that the political unrest in Hong Kong could have a knock on effect on the numbers travelling to gamble in Macau’s casinos.
Macau’s six large luxurious casino resorts operated under licence by one local and five international casino companies have all recently lost value on their shares. The largest drop was on shares in Stanley Ho’s SJM Holdings. The international companies MGM China, Galaxy entertainment Group, Sands China and Wynn Macau all lost share value of between 1 and 2 per cent. Shares in Melco Crown entertainment rose by a small 0.2 per cent.
Hope that Macau’s fortunes will improve
The main source of hope for the future prosperity of Macau’s gambling industry is the fact that over the next few years there will be several new integrated casino resorts opening in Macau. It is thought that these new casinos will attract new clients to the existing casinos and so break the recent run of decreasing monthly revenues. Also an easing of China’s investigations into corruption could mean that high rollers will once again travel to Macau’s casinos.