Skip to main content

Advertisement

Advertisement

Macau’s casino revenue drops 37% as slump hits one year

HONG KONG — Macau’s casino revenue fell for the 12th straight month last month, as China’s battle against graft and a slowing economy kept high rollers and vacationing gamblers away.

Croupiers stand at card tables in the Sands Cotai Central casino resort in Macau, China. Photo: Bloomberg

Croupiers stand at card tables in the Sands Cotai Central casino resort in Macau, China. Photo: Bloomberg

Follow TODAY on WhatsApp

HONG KONG — Macau’s casino revenue fell for the 12th straight month last month, as China’s battle against graft and a slowing economy kept high rollers and vacationing gamblers away.

Gross gaming revenue in the world’s largest gambling hub dropped 37.1 per cent to 20.35 billion patacas (S$3.44 billion), according to data released by Macau’s Gaming Inspection and Coordination Bureau. That compares with the median estimate of a 38.5 per cent decline from seven analysts surveyed by Bloomberg.

Macau casinos’ yearlong losing streak has left the city’s economy vulnerable as output tumbled 24.5 per cent in the first quarter, worse than Greece and Ukraine ever did. Casino bosses are hoping a series of new casinos they’re opening will draw back some customers. Galaxy Entertainment Group last week opened two new casino-hotels, Macau’s first in three years.

“The market believes in ‘supply creates demand’ and consensus still forecasts a Macau recovery in 2016,” wrote Ms Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG. “If the first two openings fail to stimulate demand by year end, consensus would see another major cut.” Ms Tang maintained her ‘underweight’ rating on Macau.

FORECAST CUT

Casino analysts have cut their forecasts for Macau’s gambling revenue several times this year as Chinese President Xi Jinping expands his fight against corruption and the country’s economic growth slows.

Gaming receipts are expected to widen their slump to 21 per cent this year from a 2.6 per cent drop last year, the city’s first-ever annual decline since records started in 2002. More than US$24 billion (S$32.4 billion) in the market value of the city’s six operators has been wiped out so far this year.

Galaxy Entertainment Group dropped 2.8 per cent to HK$36.05 (S$6.28) as of 1.32pm, while Sands China fell 3 per cent, MGM China Holdings lost 2.1 per cent and Wynn Macau was down 1.1 per cent. SJM Holdings gained 0.4 per cent and Melco Crown Entertainment was unchanged.

Macau’s economic output plunged 24.5 per cent in the first quarter, following a 17.2 per cent contraction in the previous quarter as gamblers stayed away and travellers cut spending. Sales of luxury goods also suffered with those of watches, clocks and jewelry down 31 per cent and leather goods 28 per cent.

The number of Macau visitors dropped 3.4 per cent in April. Mainland Chinese, who make up two-thirds of the city’s total, fell for the second month in a row, a drop of 6.4 per cent year on year. BLOOMBERG

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.