Macau Chief Executive Fernando Chui (崔世安) forecasts casino revenue to come in at 200 billion Macanese patacas (US$25 billion) next year, the lowest since 2010 and a further decline from what analysts estimate for the whole of this year.
“We try to be conservative and maintain stability,” Chui said at a press conference in Macau on Tuesday, after announcing his policy proposals to the city’s legislators for next year.
The last time casino takings fell below 200 billion Macanese patacas was in 2010, when the industry recorded gross gaming revenue of 188 billion Macanese patacas.
Photo: Bloomberg
Macau is going through its worst gaming downturn on record as gross gaming revenue fell last month for the 17th straight month amid China’s slowing economy and crackdown on corruption, which deterred high-stakes VIP gamblers from visiting the city.
Chui urged Macau’s casino operators to continue balancing their gambling and non-gaming offerings, even as they build new malls and attractions to draw more tourists.
“We will try our best to develop the economy,” Chui said, adding that Macau has a surplus of 30 billion Macanese patacas.
The Beijing-backed chief executive’s projection, compared with the 351.5 billion Macanese patacas that casino operators recorded last year, is the city’s first annual decline on record, and the 196.1 billion Macanese patacas in the first 10 months of this year.
Takings are forecast to fall 32 percent this year, according to the median estimate of 12 analysts surveyed by Bloomberg, implying gross gaming revenue of about 239 billion Macanese patacas.
Revenue decline is expected to widen this month to at least 30 percent from 28.4 percent the month before and Melco Crown Entertainment Ltd’s Studio City resort which opened on Oct. 27 is expected to drive demand from mass gamblers “with trends during December holidays a key test ahead,” UBS Group AG analyst Anthony Wong said.
Chui’s forecast is “a conservative expectation” given current levels, said Tim Craighead, a gaming analyst with Bloomberg Intelligence.
“We expect the mass-market to stabilize and recover, and we believe the VIP business has structural challenges that aren’t going away any time soon,” he said.
The chief executive also reiterated the need to step up regulation of the city’s gaming promoters, or the so-called junket operators, who provide credit to high-end players. His comments came after a case in September where an employee of a junket operator allegedly stole millions of dollars from its investors.
Macau is to continue to assess the city’s capacity to host visitors and study crowd-control measures during holidays, Chui said. The city also aims to open its second ferry terminal in the second half of next year, he added.
Possible crowd control measures by the government are not a worry, Union Gaming Group analyst Grant Govertsen said.
“The reality is that visitation is down, so I think we have a way to go before we need to worry about bursting at the seams again,” he said.
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