Macau Revenues Down Again, But Some See Signs Of Hope
Posted on: July 5, 2015, 06:38h.
Last updated on: July 5, 2015, 06:39h.

Macau’s gaming revenues are continuing their seemingly endless tumble, falling again in June to make it 13 straight months of decline for the Chinese enclave.
However, not all of the news coming out of Macau was bad for the casinos, suggesting that while the current trends are painful, there may be hope on the horizon that things could improve in the not-too-distant future.
First, though, there’s the bad news.
Macau’s Gaming Inspection and Coordination Bureau reported that casinos in the territory took in less than $2.2 billion in gaming revenue in June, down 36 percent compared to the same period a year earlier.
That is the lowest figure for Macau since November 2010.
Overall, annual gaming revenues are down about 37 percent in 2015 compared to the first six months of last year.
Incremental Improvement Provides Some Hope
Still, the June figures were slightly better than the projections of some analysts.
“Although a 36 percent year-over-year decline is far from healthy, we find it encouraging the theme of modest sequential comparison improvement remains on trend,” said gaming analyst Steven Wieczynski of Stifel Nicolaus Capital Markets.
In other words, the fact that things have been slightly less terrible for Macau recently is a step in the right direction. There are other indications that revenues could start to tick back up this summer, too.
Gaming revenues were actually up over the last nine days of the month, which could be related to the start of the summer tourism season.
If those increases continue into July, the annual numbers could begin looking much better for Macau, especially since the last few months of 2014 were particularly brutal for the casinos there.
Relaxed Visitation Rules Could Encourage More Tourism
In addition, the Chinese government finally seems to be stepping in to help Macau a bit. As of Wednesday, visitation rules have been relaxed, and mainland Chinese residents can now visit Macau twice per month rather than twice per every 60 day period. The maximum length of any one stay has also increased from five days to seven.
That decision caused many casino stocks to surge this week. Four of five casino stocks listed in Hong Kong saw their biggest gains in the past four years, including MGM China, Wynn Macau, and Sands China.
Even if the actual impact of this decision is relatively small, it may signal a change in policy from the mainland Chinese government, which hurt Macau’s gaming industry significantly with its anti-corruption policies that cut much of the money flow to the territory.
Analysts expect more supportive measures from China later in 2015, and even if none of these changes are dramatic, they could have a positive cumulative effect.
But not all of the news coming out of Macau is positive. The Macau government is introducing a full smoking ban in its legislature this week. That bill is likely to be passed later this year, and could be implemented as soon as early next year.
Based on the impact that a ban on smoking in mass market casino areas had, analysts believe that this new ban, which would expand to more private gaming areas, could similarly harm spending by high rollers, with some predicting a 10 to 15 percent reduction in revenues because of the smoking prohibition.
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