It was announced that China’s Golden Week holiday had a positive impact on the Macau casino shares and the economy of the struggling city in general.
According to the released reports, Galaxy Entertainment Group Ltd. gained 5.3%, followed by Sands China Ltd. that was reported to have gained 3.4%. As for Wynn Macau and MGM China Holdings Ltd., they gained 2% each.
Casino revenues play a critical role in the economy of the former Portuguese colony but the anti-corruption campaign started by the Chinese President Xi Jinping led to disastrous casino revenues as high rollers and VIP players were prevented from visiting the city.
September was the 16-th consecutive month when a sharp decline has been reported. The situation has not been so complicated since 2011 when Macau registered the worst financial performance.
According to people with knowledge on the matter, the mass market is going in the right direction after the holiday and a positive tendency might be noticed. However, the revenue generated by VIP players and the future development of the VIP gambling segment is still questionable.
In point of fact, the shares of the casino operators reached high levels due to the announcement of Li Gang, director of the Chinese government’s local liaison office. He said that the Chinese authorities are currently reviewing the complicated economy situation in Macau and they are likely to provide the struggling administrative region with the long-awaited support.
Chinese visitors and players, who have the greatest contribution to the formation of the Macau casino revenue, totaled 276,557 in the period 1st to 3rd October. In other words, they counted for 22% of all players who have taken part in gambling activities within the registered period. As compared to last year’s results, the increase is estimated at 17.7%.
Macau also welcomed more visitors as compared to the numbers reported a year earlier. In the period 1st – 3rd October as many as 327,186 people visited the administrative region, which is a 13.4% growth YOY. However, the percentage of visitors from Mainland China dropped 4.1% during the first eight months of the year.
As for the September revenue of Macau-based casinos, a decline of 33% was registered, which is slightly better than the financial performance in August when the drop was 35.5% YOY. According to market analysts, the decline in October is expected to be approximately 32%.
