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Macau Records Annual Decline For the First Time Since 2001
- January 5, 2015 By Oliver Young -
Macau casinos are in a great danger after the gaming revenue recorded a drop of 30.4% in December. This rate of decline is the largest one for the past seven months which also witnessed falling revenues.
Some well known billionaires such as Sheldon Adelson, Stanley Ho and James Packer were hit by this record drop. Even though their enormous wealth is not that badly damaged by the plummeting stocks, they will most definitely remember this unfortunate year. Packer’s Melco Crown lost HK$61 billion in 2014, whereas Ho’s SJM Holding is poorer for HK$73 billion. The biggest loser this year was certainly Sheldon Adelson whose Sands China’s shares dropped for 40% and cost him incredible HK$208 billion.
Macau had a terrible year and even though the number of tourists increased for 8% in December, the gaming revenues fell to $2.9 billion. Taken into account the other monthly revenues for Macau casinos in 2014, December was the worst month of all. As BBC reports, the overall decline of gambling revenues in Macau is 2.6% to $54.4 billion and this is the first annual drop since 2001 when gambling in Macau was liberalised.
Chinese Government Crackdown on Corruption One of the Causes
Macau is a special region of China and it is the only place in China where gambling is legal. In 2001 the country liberalised the gambling market in Macau and since then the revenues in the region were constantly growing. On several occasions Macau’s revenues were better even than those of Las Vegas.
However, the Chinese government decided that 2014 was a year to crackdown on corruption and conspicuous spending in Macau. This action scared away many of the high rollers who enjoyed spending their time gambling in the region. Exactly the government’s crackdown is seen as one of the main causes for the catastrophic year of Macau casinos.
Additionally, China announced that the country would like Macau to expand sectors such as sports, retail and culture instead of relying solely on gambling revenues.
2014 Was Extremely Bad for Macau Gambling Revenues
The December fall of stocks in Macau was just cherry on top for 2014 since the year was a complete failure for Macau’s gambling business. Another very bad month for Macau in 2014 was October when there was also a sharp drop in revenues.
In October the income fell for about 20% compared to the same period in 2013 and that was the biggest drop for Macau casinos since the region started keeping records. October was the fifth month in a row of falling revenues after two years of constant growth.
The one to comment on the situation was Steve Wynn who is the executive director of Wynn Macau Ltd. “Things in October are worse than they were,” was what he said at the time for the October’s drop. He also added that he was uncertain when Macau will recover and pointed out that the situation was really bad.