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December 2015 Macau Casino Revenue Declines again

Friday January 1,2016 :  MACAU DECEMBER NUMBERS DOWN AGAIN
 
And 2015 becomes the second year in a row to show a decline.
 
Figures for December 2015 released Friday by the Macau’s Gaming Inspection and Coordination Bureau show that revenue for the last month of 2015 dropped 21.2 percent from a year earlier to 18.3 billion patacas, the 19th straight month of decline.
 
The dismal December also meant that on an annual basis Macau fell for the second year in a row as a prolonged anti-corruption campaign and slowing economic growth continued to impact gambling businesses.
 
Gambling revenue fell 34.3 percent to 230.84 billion patacas ($28.93 billion) in 2015, government data showed, slightly better than analyst predictions of a 35 percent decline.
 
Analysts opined that the continued slowdown will give impetus to Macau's efforts to diversify away from casinos and become a more broad-based tourism hub as China's anti-corruption drive cuts into income from VIP gamblers.
 
Fitch Ratings remained optimistic, commenting: "The long-term positive outlook for Macau remains intact as the ... region is under-penetrated, at least in the mass markets."
 
Other analysts pointed to the fact that the December 2015 decline represented the smallest year-on-year fall since last January.
 
Just two years ago, China's only legal gambling hub was booming, with revenues surpassing those in Las Vegas by more than seven times and shares in the Hong Kong-listed gaming companies tripling in value.
 
More recently casino stocks have slumped 31-56 percent in 2015, although the island territory still makes revenues five times that of Las Vegas.
 
The Reuters news agency reports that the crackdown on illegal transactions using state-backed credit card UnionPay, tighter visa restrictions, a raft of graft-related arrests of Chinese businessmen and officials, and a clamp on the widely utilised underground banking system saw monthly revenues more than halve from two years ago.
 
The South China Morning Post reported that Macau’s six gambling houses have seen about US$45 billion in market value wiped out this year amid a free-fall in casino receipts, and suggested that stricter government policies and key personnel changes, including a new regulator and adviser to oversee gambling, could further impact the hard-hit industry.

The high-value VIP punters have led the downturn. VIP revenue, which accounted for more than half of Macau’s total gambling receipts, saw a 41 percent drop in the first nine months of 2015 compared with a year ago, and is set to fall another 13 percent this year, compared with a 6 percent rebound for the mass market, according to the median estimate of analysts.
 
High-stakes gambling is expected to only recover in 2017, rising by 1 percent versus 11 percent growth for the mass market the same year.
 
Analysts are forecasting another 5 per cent decline in 2016 before rebounding 7 per cent in 2017.



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