The Macau Gaming Inspection and Coordination Bureau released an official breakdown of the income generated by both the city’s VIP and mass markets in 2015. Overall, revenue from all gambling venues operating in the Chinese administrative region totaled MOP230.84 billion in 2015, down 34.3% as compared to the figure posted for 2014.
Gross gaming revenue from Macau’s VIP market dropped 39.9% to MOP127.82 billion last year. In comparison, the amount of MOP212.54 billion was reported for 2014. Income from the city’s VIP market used to account for approximately 80% of its overall revenue. However, as it could be seen from the figures above, it contributed only 50% last year.
Experts attributed the significant decrease mainly to the economic slowdown in Mainland China and the anti-corruption campaign launched by President Xi Jinping. The latter resulted in fewer high rollers traveling to the Special Administrative Region, known to be the only Chinese territory where casino gambling is legal.
Even though it could be said that the VIP market was the one to struggle the most, gross gaming revenue from mass market operations also experienced a considerable drop. Income decreased 25.9% in 2015 to MOP103.02 billion.
Macau’s casino revenue has been dropping since June 2014. By the end of 2014, it amounted to MOP351.5 billion, down 2.6% year-on-year. Following the considerable revenue decrease, VIP rooms and junket operators working in Macau started closing down.
Generally speaking, junkets or gaming promoters recruit high roller players from Mainland China and the Asia-Pacific region as a whole for the city’s casinos and even tend to lend such players money. Many believe that if revenue in Macau continues falling, more and more junket operators would shutter operations.
What is more, following the news about the major theft of millions of dollars from a junket company, the city government announced that more stringent regulations would be announced regarding the way junkets and their financial operations, in particular, are managed. According to people with knowledge of the matter, such regulations may be detrimental to Macau’s junket model.
In order to revitalize the city’s economy, officials also urged the six gambling operators providing their services there to bet on mass market players and to diversify their offerings.
