Macau’s gross gaming revenue continued to slide in November as the world’s biggest casino gambling hub is on track to close its worst year since 2016.
The tiny Chinese enclave, which took the world of gambling by storm in the late 2000s and early 2010s, recorded an 8.5% decline in its casino revenue last month.
The city’s more than 40 operational casinos and gaming clubs generated MOP22.8 billion in revenue in November, down from MOP25 billion in the same month of 2018 and from MOP26.4 billion in October 2019.
Despite the revenue drop, the figure reported was better than analysts’ expectation for a year-over-year decrease of between 10% and 13%.
November was the second weakest month for Macau’s casino industry this year, only behind August when the city’s gambling venues saw an 8.6% revenue decline. In terms of revenue generated, last month was again the second worst month for the sector, only behind September when the local gambling venues generated a total of MOP22.1 billion.
As mentioned earlier, Macau is on track for its casino industry’s worst year since 2016 when annual revenue was down 3.3% to MOP223.2 billion. The city’s gaming revenue for the 11 months to November 30, 2019 amounts to MOP269.6 billion, down 2.4% year-on-year.
What Caused Another Month of Sliding Revenue?
According to analysts, Macau’s casino revenue continued to decline due to escalating Sino-US trade tensions and ongoing protests in Hong Kong. That resulted in a weakening demand from high roller gamblers, which account for the majority of the city’s gaming revenue.
While the protests in Hong Kong have caused transport disruption and hampered travel to the financial center and then to the major casino hub, analysts and gaming executives believe that their impact on revenues has so far been minimal.
However, that impact added up to other factors that eventually caused a more substantial impact. Some of those other factors included a softening Chinese economy and a weak Chinese yuan.
Demand for VIP players has also been affected by the recent media fire against Macau’s biggest junket operator Suncity. According to Mainland media outlets, the major promoter had raked in billions of dollars from online gaming and proxy betting, activities that are prohibited under Chinese laws.
Analysts project that the upcoming visit of Chinese President Xi Jinping to Macau in December would put additional pressure on the local gambling sector. Macau visa policies have been tightened ahead of President Xi’s visit, which is expected to result in high rollers from Mainland China putting off their trips to the gambling mecca in a bid to avoid scrutiny.
While it seems that Macau will record its first year of revenue decline since 2016, analysts say that better times are coming for the major casino hub. According to experts, the city will see a “mild improvement” next year as demand is expected to grow. Early estimates are for a 3% annual revenue increase at the end of 2020, but it is to be seen whether those will be met.
Source: Macau casino revenues take a hit from Hong Kong protests and US-China trade war, slip 8.5 per cent in November, The South China Morning Post
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