Macau, the only Chinese territory where casino gambling is legal and the world’s most popular gambling destination, has seen its gross gaming revenue fall for almost two years now. Yet, it seems there is some light at the end of the tunnel, just a small flicker of light, as proceeds from the city’s casinos dropped less than expected in February.
Macau’s gambling venues generated a total of MOP19.5 billion ($2.4 billion) last month, down 0.1% year-on-year. This was the smallest decrease since the beginning of the downturn in June 2014. The reason is clear – more people traveled to the administrative region during the Lunar New Year holiday.
It has been almost two years now since Macau last posted an increase in its monthly revenue. And Chinese President Xi Jinping’s anti-corruption campaign, launched in 2013, has been seen as the main reason for the downfall. Basically, the initiative addressed the illicit flaw of money to and from Mainland China and resulted in high roller players avoiding gambling in the popular casino city in an attempt to keep low profile. Wealthy Chinese players have long been among the most favored customers at Macau’s casinos as they are known to be big spenders.
There have always been rumors and allegations that Macau-based triad members, who are in one way or another involved in the city’s casino industry, are working with criminal gangs from Mainland China. What is more, many believe that the administrative region’s gambling business, particularly its junket operators, is dominated to a great extent by such triads.
A report compiled by the City University of Hong Kong, the results of which became known earlier this week, showed certain evidence that triad members or people with triad background have indeed been involved in the junket industry. Generally speaking, junkets have long been providing transport, accommodation, and loans to Mainland China high rollers. In other words, they have been the city casinos’ link to wealthy players.
Even though few high-profile cases have been found in Macau casinos, the potential involvement of people from the Chinese organized crime into the city’s gambling industry has given hard time to Chinese officials and will certainly keep on influencing the business in a negative way. As mentioned above, the anti-graft campaign President Jinping initiated almost three years ago has been devastating to gross gaming revenue and to Macau’s economy as a whole.
As a result the city government has started to look for ways to improve its struggling casino industry and its general welfare. Officials are now calling for diversification of offering at the gambling venues so as to make them more attractive to the mass market customer.
Indeed, gambling operators have began offering different and more diverse options at their properties and analysts believe that their efforts have started to pay off. According to them, the February results are indicative of the fact that mass market customers have found the new offering alluring and they will probably help the city emerge from its current situation slowly but steadily.
