Macau’s Gaming Inspection and Coordination Bureau released a report on the financial performance of the city’s gambling venues in 2014. According to the results posted, Macau marked a 2.6% drop in its yearly gaming revenue. Last year, the world’s most popular gambling destination generated total turnover of $44.1 billion.
Macau has not posted fall in its full-year profits since 2001 when a mainland China campaign against public figures led to a decrease in high rollers.
According to the Gaming Inspection and Coordination Bureau’s report, city’s revenue is seven times the amount of money casinos in Las Vegas and on the Las Vegas Strip generated in 2014.
Back in December, Macau posted an unparalleled 30.4% year-on-year drop. By comparison, gaming analysts predicted that the decline would vary between 29% and 33%. What is more, the gambling hub marked a fall in revenue for the seventh consecutive month.
Casino operators and gaming experts attributed the decline in revenue to the anti-corruption campaign that was initiated by Chinese President Xi Jinping. As previously reported, Mr. Xi visited Macau on December 19-20 to take part in the celebration of the 15th anniversary of the city’s handover to China.
His campaign was said to have resulted in decrease in VIP players who visited the administrative region’s casinos. And this led to a $58-million loss in market value over the second half of 2014.
Shares of gambling venues that are listed on the Hong Kong Stock Exchange were reported to have fallen between 32% and 51% in 2014.
President Xi Jinping and his administration pointed out that Macau should diversify the entertainment options it offers to its visitors. In other words, the city should become less dependent on gambling and should focus on culture, retail, and sports. Due to this, new casinos will be assessed on the non-gaming activities and services they offer once the time for renewal of gambling licenses comes.
The launch of two new casinos in the second half of 2015 might bring Macau’s desired economic revival. Melco Crown and Galaxy Entertainment are the operators of the new venues and they are expected to mark a 7.5% and 11.6% net profit growth, respectively.
The two properties will open about 3,000 new rooms. A total of 6,700 more rooms will be available in early 2016 when both Sands’ The Parisian and Wynn Palace are scheduled to open doors for guests.
There is, however, no information about the number of gaming tables the venues will feature. They are determined by the government. Now, when President Xi Jinping insists on the diversification of the administrative region’s economy, fewer tables might be granted. In other words, it seems that Macau’s gambling industry might have a tough year.
