Last month, it was announced that borders between Macau and mainland China would start operating within a longer time frame and some of them would even operate around the clock. But as it became clear, this positive change was accompanied by some bad news – the tougher examination of transit visas as well as the not particularly satisfactory financial performance in November, to be more precise.
Analysts from Wells Fargo stated that the weak November results and the expected decrease in revenue for December will most certainly influence the quarterly numbers. What is more, it seems that the downfall trend will be maintained in 2015, too.
As it was reported, turnover from table games dropped by 13% and the total gaming revenue marked a 19.6% decrease back in November. It added up to MOP24.27 billion (US$3.04 billion).
According to Wells Fargo, a prominent holding that specializes in the provision of various banking and financial services, gaming revenue for December will drop by 22%, as compared to last year. The company predicted that turnover from VIP players will drop by 28% and mass market revenue will post a 12% decrease.
Wells Fargo’s experts stated that gambling in Macau will maintain its downfall trend for at least six months. A -4% growth in same store revenue is expected with a 2% increase in same store mass and a -7% increase in VIP revenues.
Wells Fargo shared that it might be a good idea for investors to refrain from purchases until situation in China is improved or a growth in earnings from gambling activities is marked.
Fernando Chui Sai On, Chief Executive of Macau, said that local government has prepared a draft of the 2015 budget. Monthly gaming revenue is estimated to reach MOP27.5 billion, as compared to last year’s MOP30 billion.
According to the draft, local regulatory body expects to collect the amount of MOP115.5 billion in direct gaming taxes in 2015. Back in 2013, it had predicted that MOP117.8 billion would be collected.
Mr. Chui promised that he will monitor the performance of Macau’s gambling industry and he will take due measures to ensure its improvement.
Lionel Leong Vai Tac, who was recently appointed as the new Secretary for Economy and Finance, also stated that he will examine closely the reasons for the decline in gaming turnover. Mr. Leong will replace Francis Tam Pak Yuen and will assume his duty on December 20.
Wells Fargo shared its opinion on the change. The company stated that although Mr. Tam held his position for 15 years, Mr. Leong “is a suitable replacement” and his appointment might lead to certain positive changes.
