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Macau Facing Worrying Gaming Revenue Slump

Mia Gardner | 12 Sep 2019

Despite havingmore casinos and high rollers than Las Vegas, things are not looking too good for the operators in the Macau region of China. According to the head of Suncity Group Holdings Limited, an operator from the area, the region is likely to see a dip of around 20% when it comes to their gross revenues in the fourth quarter of 2019. This decline has been a year-on-year trend for the last few years and is becoming a concerning reality for land-based and online casino operators in the region.

The region showed a small drop in the first quarter, which prompted Alvin Chau Cheok Wa of Suncity Group Holdings Limited to make his predictions for the rest of the year. Unfortunately for the operators, he was right and the results were slightly worse than he initially thought they would be. The decline has been getting steeper throughout 2019 and is not looking good for the final few months of the year.

VIP Clients Not Coming To Macau

One of the biggest areas of concern for Macau operators is the decrease in the number and frequency of high rollers visiting the region. The resorts are all reporting far fewer VIP guests coming to stay with them, and those that are still coming are not staying for as long as they used to. Another concern is that they do not seem to be playing in the casinos as much during their stays.

When examining the visits of these VIP guests, the operators are seeing a trend of less credit being requested by the players. Some are even declining to ask for credit all together, which means that they are not likely to play in the casinos as much. It has also been noted that those VIPs who have been granted credit are taking longer to repay what is owed. This could well be due to the depreciation of the Chinese yuan in comparison to the Hong Kong and USA dollars. The state of the Chinese economy is clearly having a strong impact on the gaming industry within the country.

When compared to the first half of 2018, the same time period in 2019 is clearly significantly lower. The income from VIPs and high rollers is 14.5% lower this year, with a figure of $8.89 billion. The overall stats, not just from the VIP players, is just as bad.

Not Even Baccarat Is Safe

The country’s favourite betting game, Baccarat, is also showing a strong decline in players and revenues received by operators. Macau’s Gaming Inspection and Coordination Bureau released figures that showed a second quarter decline in revenues from this game specifically in the region. The decline is as bad as 15.6% year on year, and clearly indicates just how bad things have gotten.

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