Weekly Poll: How will Macau perform in 2015?

Weekly Poll: How will Macau perform in 2015?
 Weekly Poll: How will Macau perform in 2015?[polldaddy poll=8563355]

The former Portuguese enclave, Macau, recorded its worst year, ending a decade of expansion that turned the city into the world’s gambling hub, which is why we decided to ask our readers, “How will Macau perform in 2015?”

60% said, “Decline in 2015” and 40% voted, “Decline in 2015.”

Macau casino revenue fell 2.6% to 351 billion patacas ($44 billion) in 2014, after a record a 30.4% drop to 23.3 billion in December, the seventh straight month of decline in 2014. Last year is also the first annual decline since the city began releasing financial figures in 2002.

Beijing’s corruption crackdown has deterred high rollers, who account for two-thirds of Macau’s casino revenue, and wiped out about $73 billion in market value of companies such as Wynn Resorts and SJM Holdings.

Analysts are divided about 2015 gaming revenue outlook. Wells Fargo and Union Gaming Group both estimate a 20% year-on-year decline in the first quarter.

Deutsche Bank said it has reduced Macau’s 2015 gaming revenue forecast from the previous estimate of staying flat from last year to an expected year-on-year decline of 8%.

However, Morgan Stanley’s latest report cites favorable factors for Macau gaming shares in 2015. According to the bank, “The worst numbers are already out, so in 2015, especially in the second half, we will have an easy base for comparison when we look at growth numbers.”

“Slower and steadier growth should be expected as the market matures,” said Deputy Director of Macau’s gaming regulator, who predicted a revenue slump until mid-2015.

Alongside the corruption crackdown, Beijing has been intensifying its calls for Macau to diversify its economy away from gambling, which accounted for more than 80% of the local government’s revenue in 2013, and transform the city into a global tourism and leisure center. Chinese President Xi Jinping reiterated the message during a rare visit to the former Portuguese colony last month for the 15th anniversary of its return to China.

Casino companies including Sands China, which is set to complete the Parisian Macao, and Galaxy, starting’s second phase expansion of its resort on the Cotai Strip, are shifting resources from high rollers to lure more Chinese tourists and other mass-market gamblers by building malls, theaters, restaurants and hotels.

“We will see stabilization in revenue in the second half of the year, because the base becomes easier and also you’ve got new projects that will drive volume growth,” said Aaron Fischer, a HongKong-based analyst at CLSA Ltd.

Next week, we ask, “Which Conferences will you be attending?”  as many iGaming industry workers are planning to hit London for the combined iGaming conferences ICE and the London Affiliate Conference (LAC). Join our weekly poll and check back next week for the result.