September 1, 2015 - 5:10 am
Macau’s gaming revenue free-fall continued through August as the Chinese casino market suffered its 15th straight monthly decline.
According to results reported Tuesday by Macau’s Gaming Inspection and Coordination Bureau, the three dozen large and small casinos collected $2.3 billion from gamblers during August, a drop of 35.5 percent from a year ago. The month marked the region’s seventh straight decline of 30 percent or higher, including a record 49 percent drop in February.
If there was a bright spot, according to Union Gaming Group director Grant Govertsen, the August results were slightly better than analysts had predicted.
“Gross gaming revenue has now remained in a fairly tight range for seven consecutive months,” said Govertsen, who is based in Macau. “August was in the middle of this range.”
For the year, Macau gaming revenue is down 36.5 percent compared to the first eight months of 2014, when the market suffered its first-ever annual drop. Macau. the world’s largest gaming market by revenue, produced a record $45.2 billion in gaming totals in 2013. The figure fell 2.6 percent in 2014.
Bloomberg News reported Monday that the gaming revenue slide that began last summer has dragged Macau’s gross domestic product to its lowest levels since 2011. Last year, the mainland Chinese government began a crackdown on corruption that has ensnared several high-end junket operators tasked with bringing big spending customers to Macau’s casinos.
Macquarie Securities gaming analyst Chad Beynon said monthly revenue from high-end play should remain steady until the anti-corruption campaign wanes.
“We don’t see (that) happening anytime soon,” he said.
Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International operate casinos in Macau and are expanding their holdings.
Macau continues to weigh down on Wynn and Sands, which realize more than 60 percent of their quarterly earnings from the Chinese enclave.
Bloomberg said Macau’s central government announced it would cut public spending in response to the casino industry downturn. Costs will be reduced in areas such as the purchase of daily supplies and third-party services, according to a government statement.
Macau casino operators hoped new projects that opened recently would boost customer demand. However, visitation from Mainland China fell 6.1 percent in July.
Govertsen told investors he doesn’t believe this week’s one-time holiday in Macau, which marks the 70th anniversary of the formal end of World War II, will drive additional business.
“Given the gravity of the occasion there appears to be an elevation in the call for patriotic sentiment, which we believe could manifest result in softer visitation to Macau,” Govertsen said. “As such, we would not be surprised to see the first week of September with a lower-than-recent-normal gross gaming revenue.”
Even as the market continues to slide, more competition is coming to Macau.
The 1,600-room Macau Studio City Hotel-Casino being built by Melco-Crown is expected to open by the end of October. Las Vegas Sands’ $2.7 billion Parisian resort will open next summer, while Wynn Resorts set a late March opening for the $4.1 billion Wynn Palace. MGM Resorts International expects to open its $2.9 billion MGM Cotai late next year.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.