Macau casino revenue fell in July as the World Cup, which ended mid-month, distracted bettors while business from high-stakes gamblers remained weak.
Total gross gaming revenue in the world’s biggest gambling hub dropped 3.6 percent to 28.42 billion patacas ($3.56 billion) for a second consecutive month of declines, Macau’s Gaming Inspection and Coordination Bureau said today. This compared with the median estimate of a 3.8 percent decline from six analysts surveyed by Bloomberg News.
Revenue didn’t pick up even after the monthlong World Cup soccer tournament ended July 13, Cameron McKnight, a New York-based analyst at Wells Fargo & Co., wrote in a research note today. Macau’s casino revenue fell 3.7 percent to 27 billion patacas in June, the first decline in five years.
“We continue to believe 2014 will be choppy as VIP growth likely remains weak into fourth quarter and we haven’t seen a sustained improvement in revenues post World Cup,” McKnight wrote. China’s anti-corruption campaign “could impact player sentiment and spending,” he said.
Casinos in Macau, the only place in China where they’re legal, had relied on mainland high-rollers brought in by junket operators for more than 60 percent of revenue. Such gamblers, who usually wager at least HK$5 million ($645,000) per trip, have cut back amid a crackdown on corruption in China.
Macau’s gaming revenue is expected to grow in the single digit this year, as the casino industry enters a stable development phase after robust growth in the first decade since it was liberalized, Secretary for Economy and Finance Francis Tam said in a statement posted on the government’s website.
The government “will continue to encourage diversified investments” by restricting the industry’s growth, and will prioritize investments in non-gaming elements when it considers approvals for new gaming tables, Tam said in the statement.
Sands China Ltd. (1928) fell 2.1 percent to HK$56.45 at the close of trading in Hong Kong, while Galaxy Entertainment Group Ltd. (27) declined 2.4 percent and Melco Crown Entertainment Ltd. lost 2.1 percent. Wynn Macau Ltd. dropped 1.8 percent, MGM China Holdings Ltd. fell 2.1 percent, and SJM Holdings Ltd. declined 1.4 percent.
President Xi Jinping’s campaign against graft and clampdown on lavish spending have hurt luxury sales from Chow Tai Fook Jewellery Group Ltd. (1929) to Rolex watches. This week, the ruling Communist Party announced its highest-level corruption probe in 60 years, investigating former Politburo Standing Committee member Zhou Yongkang.
In the first seven months, Macau casino revenue rose 10 percent to 221.5 billion patacas.
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