Tue, Dec 03, 2019 - Page 10 News List

Macau’s gaming revenue declines

Bloomberg

Macau casinos showed further weakness last month as the world’s largest gambling hub heads toward its first annual revenue decline in three years.

Gross gaming revenue was 22.9 billion patacas (US$2.85 billion) last month, down 8.5 percent from a year earlier, data from the Macau Gaming Inspection and Coordination Bureau showed.

That was slightly better than the median analyst estimate of a 10 percent fall.

Year-to-date revenue is down 2.4 percent, data showed.

Macau casinos are heading for their first yearly decline since 2016 as multiple headwinds have thwarted any prospects of a recovery.

Here are the biggest obstacles the industry has faced: the trade dispute between China and the US; China’s economy is experiencing the slowest growth since the 1990s; a weakening yuan that dilutes gamblers’ spending power; escalating protests in nearby Hong Kong; rival gaming hubs emerging in Southeast Asia; and a crackdown on cross-border gaming that squeezed junkets, hurting the VIP sector.

Add one more headache last month: Visa policies to Macau were tightened ahead of the 20th anniversary of its handover from Portugal and an expected visit from Chinese President Xi Jinping (習近平), Credit Suisse Group analyst Kenneth Fong said.

The restrictions are crimping visitation numbers.

While the short-term outlook is difficult to predict, analysts expect a mild improvement for Macau next year, with gaming revenue helped by easier comparisons and some pent-up demand.

Estimates are for a 3 percent increase — still a long way from the double-digit jumps in 2017 and last year.

The Bloomberg Intelligence index of Macau operators rose 0.3 percent in early trading in Hong Kong yesterday. The gauge declined 3.4 percent last month.

While it is still up for the year, it has dropped 20 percent from a peak in April.

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