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Casinos in Macau Mark 12 Months of Revenue Increase
- August 2, 2017 By Oliver Young -
According to government data, casinos in Macau, one of the biggest gambling destinations in the world, saw a monthly revenue increase of 29% for the month of July, marking 12 months of consecutive gains for the industry. The gambling hub, which suffered a big blow after the Chinese government launched a crackdown on illegal gambling activities in the autonomous region, seems to have an increased number of tourists and VIP gamblers to thank for the new numbers.
Investments Paid Off
Macau’s revenue decline began after Chinese President Xi Jinping initiated an anti-corruption campaign that specifically targeted Macau, which the government believed to be a destination corrupt officials were using to launder money. Determined to put fund outflow under control but also change Macau’s public image, Jinping launched a number of control measures, including accessing records of UnionPay transfers – China’s leading payments provider, which consequently had a direct effect on the casino revenue in the region.
To counteract the decline and draw in high-spenders, new big resorts were launched in Macau like Wynn’s Palace Resort and Sand’s the Parisian Macau, which sports a replica of the Eifel Tower. Investments in the industry showed the first signs of success as early as last year, when in August a revenue increase was noted for the first time after over two years of steady decline.
According to recent government data picked up by the DailyMail, the successful streak continued to this July 2017, when gambling revenue in Macau reached 23 billon Macanese Patacas (US$ 2.86 billion), or close to 30% more than last year, thus securing a full year of gains for the industry.
Speaking to the UK media outlet, CEO of Asian Gaming Magazine, Andrew Scott, suggested that it was also the return of high-rollers that helped the industry, apart from the investments made in the entertainment sector. Namely, Scott sees rich people coming to Macau as the “rite of passage” in China, and considering millionaires are made “every day” in the country, the estimates are that more will continue to visit Macau in the future.
A Continuous Success
Predictions about Macau hitting a full-year streak were made even back in August, when news of the industry having 9 consecutive months of success were in the media focus. Back at the time, the total gross gaming revenue was up by 16.3%, surpassing analysts’ predictions that it will grow by only 15%, while three of the biggest casino operators also noted an increase in stock value after reports showed they were gaining market share in the area.
Namely, Wynn’s stock jumped by 3% during August, followed by MGM and Sands, each of which saw a near 2% increase. All of the three operators also reported that their Macau operations contributed significantly to their first quarter earnings.
According to local sources, it seems that junket operators are once again helping the boost in VIP revenue, following tough two years. Although many have gone out of the business during the crackdown, there are still survivors who give credit to high-rollers at low rates to help them bypass cash outflow limits. The increase in high-rollers, though in number not in “weight”, together with the infrastructural developments and investments made in the area are seen as the most probable causes for the successful year.