Macau’s gambling revenue in October fell 23% year on year, the fifth and the steepest drop up to date in the world’s biggest gambling hub, brought about by China’s continued crackdown against corruption, dwindling tourism numbers and a slowdown in economic growth.
For the month, Macau’s gross gambling revenue fell to MOP28 billion ($3.5 billion) compared to MOP36.5 billion ($4.57 billion) on October 2013. The 23% drop in revenue were right in line with analysts’ predictions, beating the previous record set in January 2009 when revenue fell 17.1 percent in the middle of the global financial crisis.
October 2013 was the second biggest revenue month in Macau, bested only by February 2014 when the city’s casinos reported earning MOP38 billion ($4.75 billion).
A dramatic drop in VIP gambling has been the biggest reason behind the fall of revenue. Slow economic growth has also forced a lot of gamblers to keep their distance away from Macau’s casinos. Then there’s Beijing’s decision to tighten visa regulations and restrict access to Hong Kong because of pro-democracy protests in the city. That move resulted in a drop in tourism numbers in Hong Kong and not getting as many visitors to fill up its mass market tables in Macau.
According to Macau’s Secretary of Economy and Finance Francis Tam Pak Yuen, Macau casinos may not pull out of their current revenue decline until the second half of next year. Tam also agreed with recent projections that Macau could experience flat annual growth when full-year figures are tallied. That would be the first year of non-growth since Macau began keeping records in 2002.
While Las Vegas Sands and Sands China CEO Sheldon Adelson said during Las Vegas Sands’ post-earnings briefing last month,”It is only a matter of time before the cycle reverses itself,” Adelson. “No one has ever suggested that the behavior of Chinese and Asian people, which has been established over a 3,000-year history, is going to change.”
