News of the slight growth in Macau’s gross gaming revenue recently ignited a faint glimmer of hope that the city state’s $29 billion casino industry is finally rebounding after 26 straight months of decline.
Well, not so fast, according to billionaire Lui Che-Woo.
The chairman of Galaxy Entertainment Group told Bloomberg News that “it’s still too early to say” if Macau is rebounding, despite the city state eking a 1.1 percent growth in August to reach a GGR of MOP18.8 billion (USD2.4 billion).
“While Macau’s gambling industry has hit the bottom, it’s still too early to call it a recovery,” the 87-year-old casino mogul told the news agency.
Lui forecast that it will take at least two more years for the city state to bounce back since “it takes time to gradually attract more mass-market customers.” Macau officials have been pushing casino operators to build mass market-friendly resorts that have more entertainment options other than gambling.
Galaxy Entertainment Group reported a 26 percent increase in net profit—HK$2.6 billion (US$335.31 million)—compared to the same period last year. But the casino operator is facing increased competition: Wynn Macau opened the $4.2 billion Wynn Palace several weeks ago, while Sands China’s Parisian Macao is scheduled to open its doors to the public in September. MGM China is also planning to open a new resort in Cotai in the coming months.
Lui said Galaxy plans to target mass market—not VIPs—to boost its revenues by as much as 20 percent, after the casino operator observed that revenue from VIP visitors has dulled gains from mass market visitors in the first half of the year. Just like the five other listed casino operators in Macau, Galaxy has been hit by the declining demand from Chinese high rollers following Beijing’s crackdown on corruption.
“We’ve provided more new facilities to catch the attention of the mass market,” the businessman said, according to the news outlet.