If everyone involved in the casino industry expected 2020 to shore up the flat gross gaming revenue (GGR) in Macau, they might want to reconsider their position. According to the city’s budget plan for next year, which was just released on Tuesday, local officials aren’t expecting any major positive growth. In fact, they actually budgeted for virtually no growth, anticipating GGR to be $32.2 billion and gaming taxable income to be about $11.27 billion, the same as what was budgeted for 2019.
Although Macau’s government typically takes a conservative approach to its budgets, gaming has still fallen short this year. Over the first ten months, GGR came in at right around $30.57 billion, a year-on-year slide of 1.8%. That was not at all what had been expected, given that GGR a year earlier had increased 14% over 2017, reaching $37.52 billion, and bean counters had previously stated that 5.8% growth should be achieved for 2019.
2018 marked the second consecutive year that GGR had increased, coming on the heels of a three-year drought. Compared to 2016, 2017 saw a 19.5% increase in GGR and the rolling improvements had analysts initially believing that the worst was now behind the gambling city.
A poorly-timed statement by the Macau Gaming Staff Rights Association is going to meet considerable resistance because of the gaming forecast, as well as the local industry’s current performance. The labor activist group published a statement on Tuesday that campaigns for a salary increase of “at least 5 percent” for workers employed by gaming operators. The group wants the Macau government to put pressure on the companies to increase salaries, as well as to offer bonuses for night shifts and to implement a strict five-day work week.
Cloee Chao, who heads the MGSRA, told GGRAsia, “During the years of revenue decline in the Macau gaming industry, we were aware of the bad market conditions and did not have any pay hike, bearing the burden together with the companies. In recent years… [casino] dealers got at most a 2.5-percent pay hike annually.”
Casinos in Macau have been giving annual increases that vary by venue and by employment type and longevity. The majority also offer additional bonuses, typically a summer and a winter bonus, equal to as much as one month’s salary. In general, earnings in the gaming industry increased by 3.8% this year over 2018 and hover, without bonuses, around $3,045.
Given the state of GGR in Macau, convincing operators to take a bigger slice out of their revenue to give to workers is going to be a difficult task. While an increase is warranted, due to a higher consumer price index in the city, receiving the 5% isn’t realistic at this point.
