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rfmcdonaldVinicy Chan and Billy Chan, writing for Bloomberg, note that casino-dependent Macau is seeing something of an economic slowdown between a crackdown on Chinese gambling and mass protests in Hong Kong.
Total casino revenue fell 12 percent to 25.6 billion patacas ($3.2 billion) in September, the fourth straight month it’s declined. The figure, the biggest drop since June 2009, was expected to drop by 12 percent to 13 percent from a year earlier, state-controlled Teledifusao de Macau reported last week, citing the city’s Secretary for Economy and Finance Francis Tam.
“You get the dynamic now whereas these gaming names have been so crushed that even a slight improvement is viewed positively,” Grant Govertsen at Union Gaming Group, said today. “You got a lot of investors who want to be in these names looking for an entry point.”
[. . .]
Chinese President Xi Jinping’s crackdown on corruption has dented spending by high-stakes gamblers in Macau, the only place in China where casinos are legal. Pro-democracy demonstrations in Hong Kong may have caused mainland Chinese to defer their usual joint Hong Kong-Macau trips, Govertsen wrote in a note yesterday.
“Mass market casino foot traffic -- especially at the big-box casinos on Cotai -- and certain instances of table games minimums, was lower than we expected,” he said. Casino companies have been opening resorts on the Cotai Strip, Asia’s answer to the Las Vegas Strip.
About 20 percent to 25 percent of mainland travelers to Macau also go to Hong Kong on the same trip, said Karen Tang, an analyst at Deutsche Bank AG.
High rollers account for more than 60 percent of the city’s gaming revenue. The number of Chinese tourists normally rises during China’s annual week-long National Day holidays that start on Oct. 1, one of the city’s busiest times of the year.
The political protests in Hong Kong “would put further pressure on VIP visitation,” said Govertsen, using the term that refers to high-stakes gamblers.
