Macau Casino Revenue Falls Most in Three Years as Economy Bites
(Bloomberg) -- Macau casino revenue fell the most in almost three years as China’s sluggish economy continued its chilling effect on high-end customers. Analysts, however, believe the world’s largest gaming hub has seen the worst of the recent slowdown.
- Gross gaming revenue for Macau casino operators was 23.6 billion patacas ($2.9 billion) in April, down 8.3 percent from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That was roughly in line with the median analyst estimate calling for an 8 percent decline.
- April’s result, which is far below the double-digit growth seen at this time last year, shows China’s economic slowdown continues to take a toll on casino operators, as the mainland provides more than two thirds of Macau’s visitors. Gaming revenue has stagnated in 2019, ending a more than two-year winning streak.
- The softening trend is expected to ease amid signs that the world’s second-largest economy is stabilizing. Analysts predict gaming revenue will grow 2 percent in May, followed by further momentum in the second half as a recovering credit cycle and stronger mass tourism bring in more gamblers.
- Although business from high rollers remains weak, the pullback hasn’t been as bad as feared. At the same time, the mass market segment -- which contributes a smaller portion of overall revenue -- has been showing surprising strength and may become a bigger driver of growth.
- Macau casino stocks have been rallying in the face of anemic revenue growth, amid a more optimistic outlook. The Bloomberg Intelligence index of Macau casino stocks rose 11 percent in April, extending this year’s gains to 29 percent. The best performer for April was Wynn Macau Ltd., with a 22 percent gain. MGM China Holdings Ltd.’s shares performed the worst, losing 1.6 percent.
- Read analysts’ broader take on Macau here
- Read more: Why Macau Casinos Keep Rallying Despite a Gloomy Outlook
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