Macau casino revenues fall 9.6 percent to $2.3B

Macau casino revenues fall 9.6 percent to $2.3BMacau casino revenues tumbled 9.6 percent to $2.3 billion during May compared to the same period a year ago.

The drop was slightly more than analysts had predicted, according to a Bloomberg report. May revenues in 2015 were off 37.1 percent compared to May of 2014, which was the last month that the Macau Gaming Inspection  and Coordination Bureau had reported an increase, 9.3 percent.

Revenues  have been sliding each month since then as the Beijing government’s anti-corruption investigation and a slowdown in the mainland economy has resulted in the wealthiest Chinese gamblers avoiding the Macau casinos.

There are also tighter restrictions such as the recent ban on telephone wagering, which had been favored by the VIP gamblers who have temporarily lost their appetite for the big bets at Macau baccarat tables. 

Macau has been struggling for two years as China’s economy slowed and President Xi Jinping’s corruption crackdown caused high-stakes gamblers to avoid the world’s largest gaming hub. Operators in the city, the only place in China where casinos are legal, have responded by shifting focus to tourists and recreational gamblers, with Wynn Macau Ltd. and Sands China Ltd. due to open new resorts later this year.

The steeper decline in May was “partly due to the tightening policies on the industry, especially the recent ban on phone betting,” Daiwa Capital Markets Hong Kong analyst Jamie Soo said via telephone, adding the limited revenue improvement of about 1 billion patacas from April, despite last month’s Labor Day public holiday, supported his cautious view of Macau casino stocks.

Casinos there are continuing to struggle with responses to the government’s demand for more non-gaming features.

The Secretarty for Economy and Finance Lionel Leong said Wednesday, "We very much hope to have more tourist products suitable for the family… In the past we only looked at gaming revenues,” but going forward he made it clear that the rules of the game, so to speak, have been changed. “We need to have new clients.” 

This is an approach to gaming regulation and operations that is foreign to the ears and senses of the Las Vegas-based companies  that have contributed much of the $33 billion invested in Macau casinos in the 13 years through the end of 2014.

The directions given to Macau operators are kind of like Nevada  Gov. Brian Sandoval directing Las Strip casinos to build more bowling alleys, art galleries and movie theaters.

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: 

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