Macau casinos see worst-ever drop as China reins in VIPs
Macau : Macau’s casinos saw their worst monthly performance in almost a decade as analysts blamed China’s corruption crackdown for denting the industry’s upmarket segment.
Official figures showed that gambling revenues in the world’s biggest gaming centre plunged by 23 percent in October to 28.025 billion patacas ($3.51 billion), when compared to the same month last year.
The magnitude of the decline is the highest since such data became available in 2005, analysts say.
They predict that the slump will continue until next year as the city struggles to shift its focus away from its traditional dependence on big-spenders from mainland China.
Chinese high rollers have been reined in by anti-corruption drive initiated by Chinese President Xi Jinping, who has warned graft could destroy the party.
He has vowed to crack down on high-ranking officials, described as “tigers”, along with low-level “flies”, in a campaign which includes curbing lavish spending.
“(The) VIP (sector) is slowing due to anti-corruption and the tightening of junket liquidity,” CLSA analyst Richard Huang told AFP.Huang said mass market tourism had potential to be a money-spinner for Macau but there were not yet enough facilities available for visitors.
“For the mass market there is a lack of hotel rooms. It’s not going to be solved until new casinos open,” he said.
Casino operators have plans to expand their operations on the Cotai Strip, a former swamp which is being reclaimed and transformed into mass market resorts.
Barclay’s analyst Phoebe Tse said that the anti-corruption drive was mainly to blame for the decline and said it would “last until sometime in the second quarter (of) 2015” when more hotel rooms become available.
Macau is the only part of China where casino gambling is legal.It overtook Las Vegas as the world’s gaming capital in terms of revenue after the sector was opened up to foreign competition in 2002 — the city’s gambling revenue is now multiple times that of the American city.
Revenues hit a yearly record in 2013 at $45 billion, official figures showed.- AFP
Nov. 5 , 2014
