Singapore - Macau’s casino revenue in April fell 38.8 percent as China’s widening efforts to battle against graft deterred high-stakes gamblers. A wave of projects being completed amid the downturn also sparked concern.
Gross gaming revenue in the world’s largest gambling hub dropped to 19.2 billion patacas ($2.4 billion) last month, the 11th straight month of decline, according to data released on Monday by Macau’s Gaming Inspection and Coordination Bureau. That compares with a median estimate of a 39 percent decline from eight analysts surveyed by Bloomberg.
VIP gaming in Macau has been hit by President Xi Jinping’s campaign on graft that snared thousands of officials and is expanding to include executives at state-owned enterprises. Demand is further damped by China’s economic slowdown even as operators such as Sands China Ltd are building diversified resorts and hotels to draw more mass-market clients to Macau.
“Recent data on hotel room rates and occupancy drop in Macau is concerning when we expect to see a 50 percent increase in numbers of rooms over the next 18 months,” Praveen K. Choudhary of Morgan Stanley wrote in a report dated April 28. The analyst downgraded his view to “cautious” as the casino industry showed “no signs of bottoming”.
Morgan Stanley expects gross gaming revenue in the former Portuguese colony to shrink 24 percent this year, bringing the industry back to near 2011 levels. Macau recorded its biggest monthly gaming revenue decline in February, at 48.6 percent, due to weak demand over the Lunar New Year holiday, traditionally a peak gambling period.
* With assistance from Billy Chan and Lisa Pham in Hong Kong
Bloomberg