Industry News

Macau Gambling revenues decline in November

The world’s largest gambling hub has seen another decline in its revenue.

Gaming revenues in Macau declined by 8.5% in November, recording the second weakest number in 2019.

Revenues in the city dropped to $2.8 billion, which experts say is largely due to the trade war between Beijing and Washington.

Ongoing protests in nearby Hong Kong and uncertainty regarding regulations are also to blame.

In October, revenues had declined by 3.2%, the seventh time profits had dropped in 2019. The month is usually a lucrative one for the city as it is the time of Golden Week, a public holiday in China.

During the first five days of the holiday, visitor numbers grew 13.3% to 780,238, according to statistics released by the Macao Government Tourism Office. The 11% gain over the period was markedly lower than 2018’s gain of 19%.

Speaking to iag, Bernstein’s Vitaly Umansky, Eunice Lee and Kelsey Zhu had already predicted the loss.

They said, “While hotel bookings are solid, we expect the quality of the customers will be lower [i.e. lower spending per head] this year.”

“Room comps will be high during the period, but likely go to an average lower spend customer than in 2018. Consequently, high-end play will likely remain tepid during Golden Week and during the whole of October.”

The border gate was the most popular point of entry over the holiday with 481,879 visitors passing through into Macau.

Macau’s August GGR totaled $3.01 billion, down from $3.28 billion according to data published Sunday by the region’s Gaming Inspection and Coordination Bureau (DICJ). The eighth month of the year was the third-worst of 2019, with only April and June posting lower returns.

READ
NFL Draft Expected to Generate the Largest Betting Streak Ever This year

It’s thought that the decline will impact high rollers MGM Resorts International, Melco Resorts & Entertainment Limited MLCO, Wynn Resorts, and Las Vegas Sands Corporation the most. VIP rooms have seen the biggest downfall with high-rollers struggling to give Macau the rental returns it is used to.

The number was better than what was expected, however, with a median analyst estimate suggesting a 10% to 13% downturn before the data was released.

The casinos are now heading for their first annual decline since 2016, with China’s economy experiencing the slowest growth since the 1990s.

Visa policies to Macau have been tightened ahead of the 20th anniversary of its handover from Portugal and the anticipated visit of President Xi Jinping. The country has already seen a dip in its tourism numbers and restrictions are expected to remain in place until December 20.

A recent study from the University of Macau found that the percentage of gamblers in the area dropped from 51.5% in 2016 to 40.9% in 2019. Macau was deemed to be falling into a technical recession in August after gaming service exports took a 0.8% hit.

While it remains difficult to predict the future of Macau’s gambling scene, experts believe the industry will see a mild improvement in 2020, with a 3% increase. Last year, October and December were two months where GGR exceeded $3.21 in the city.

Outside of Macau, however, the future remains bright for the gambling industry with the legalization of sports betting across America.

Most casino operators are currently looking to expand their sports betting footprints as states including New Jersey, Delaware, Rhode Island, New Hampshire, and Illinois make it legal for residents to gamble on their favorite games.

READ
5 Cool Comics-Based Slot Games to Check out This Fall

A rise in demand for gaming and leisure across the country also continues to boost the industry.

Missouri, Louisiana, South Carolina, and Maryland are all likely to follow suit in the coming months.

The online betting industry is expected to grow from the 2017 market capitalization of $45.8 billion to a $94.4 billion market capitalization in 2024.

Tags
Show More

Related Articles

Back to top button