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Macau Gaming Revenue Drops for 20th Consecutive Month
- February 1, 2016 By Oliver Young -
The casino gaming revenue in Macau, the biggest casino gaming hub in the world, dropped 21 percent in January 2016. Analysts say that the worst may be over, despite the fact that the revenue is down for the 20th consecutive month.
More precisely, the gross gaming revenue in Macau was down 21.4 percent from last year to 18.67 billion patacas or $2.33 billion. Even though the revenue has been declining, it’s lower than the average estimate of 22 percent drop predicted by the Bloomberg analysts. The range of decline has come out from between 30 and 50 percent for most of 2015.
The revenue decline of 21.2 percent in December 2015 was the lowest single month drop since January’s 17.4 percent dip last year.
Will It Be Finally Over?
Macau which relies on its land based casinos for revenue has been battling against corruption for two years. This campaign has been slowing growth in the boarder economy in China. The gaming revenue is hovering five year lows, but industry experts say that the worst may be over.
The casinos operated by Steve Wynn and Sheldon Adelson reported quite strong four quarter revenues mainly due to the increase of middle class gamblers also called mass market casino players. Casinos which were formerly trying to attract wealthy VIP gamblers are now are trying to attract mid class players because the VIP gamers have been hit the hardest by the crackdown on corruption.
Moreover, new casinos are expected to open their doors in the near future. They will draw Chinese mid class players with their superb facilities such as the mini Eiffel Tower and the big lake with a gondola ride. Analysts predict that the Lunar New Year holiday which will kick off February 7 to 13, will increase the number of mid class visitors to Macau which accounts for up to 2/3 of the overall visitors.
Some analysts believe that the Macau’s casino gaming revenue would remain flat this year compared to 2015 when revenues fell 34 percent on the year. Others believe that gaming revenues would fall by 10 percent or go up to one percent.
A Junket Focused Association to Be Launched
A new association, the Macau Gaming Information Association (MGIA), is going to be launched on February 1, 2016. They will be launching an application which will provide daily news about the gambling industry with the focus on junkets’ operations. The app is free of change but would require the submission of a form for approval.
One of the founders of MGIA, Antonio Hoo, said that the app will protect investors and provide advice helping to improve the image of the gaming market. The number of junket operators with a valid license in Macau dropped 23 percent over the last year as 35 operators failed to renew their licenses.