Macau Revenues Down 49 Percent In February
The world’s largest gambling hub Macau continues to break records but for the wrong reasons. As expected February gambling revenues took another consecutive dive as they fell by 49 percent compared the same period last year. As we have reported extensively the main reason is China’s crackdown on corruption which has got the high rollers ducking for cover and seeking more user friendly locations to gamble like Australia.
Revenues for the month fell to $2.4 billion according to Macau’s Gaming Inspection and Coordination Bureau. The drop was in line with analyst’s forecasts which were between 45-55 percent. China’s President Xi Jinping has made it clear that Macau must seek alternative revenue sources other than gambling in order to sustain the economy in the long term. Meantime the six licensed casino operators continue to feel the losses as investors are not seeing the light at the end of the tunnel. Shares of the Hong Kong listed casinos have fallen 4-9 percent this year due to the current revenues tanking.
While analysts re pessimistic at the moment, Grant Govertsen of Union Gaming Research Macau aid,” We believe the biggest culprit for the weak month was the already-troubled VIP segment. Ultimately, while we believe there was a pickup in VIP headcount, gaming volumes just weren’t there.” Optimism is good and well but the fact that thus is the ninth consecutive monthly drop one has to ask when the bleeding will stop.