Macau Gaming Revenue Plunges to Wrap Up Worst Year Since 2015

(Bloomberg) -- Macau gaming revenue slipped for the third straight month, marking the worst annual decline since 2015 as the world’s largest gambling hub struggled to lure high rollers amid geopolitical tensions and an economic slowdown.

• Gross gaming revenue was 22.84 billion patacas ($2.85 billion) in December, down 13.7% from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That was lower than the median analyst estimate of a 15% fall. Full year revenue, at 292.5 billion patacas, is down 3.4% from 2018.

Key Insights

• The latest numbers show continuing pain for casino operators. Arrivals in December were further crimped by President Xi Jinping’s visit to the city to celebrate the 20th anniversary of Macau’s handover. This meant tighter visa policies, travel restrictions and enhanced border security.
• This year was particularly challenging for the industry as it faced trade war uncertainty, a slowing Chinese economy, escalating protests in Hong Kong and a crackdown on cross-border gaming that squeezed junkets and the VIP sector. Meanwhile, rival gaming hubs such as Vietnam are threatening to chip away at Macau’s dominance.
• 2020 may be better for casino operators as new hotel supply and infrastructure improvements kick in. Xi, during his recent visit, urged the former Portuguese colony to diversify its economy and carve out a wider role in the Greater Bay Area and his signature “One Belt, One Road” initiative.

Market Performance

• The Bloomberg Intelligence index of Macau operators rose 12% in December as investor sentiment improved over signs of a trade war truce and Beijing’s supportive stance toward the enclave. That compared to a 7% gain in the benchmark Hang Seng index.

Get More

• Click here for analysts’ survey on Macau gaming
• Dec. 20, Xi Praises Macau’s Stability Amid Unrest in Nearby Hong Kong
• Dec. 10, Macau Casinos Face Biggest Threat to Growth in Five Years
• Dec. 5, Melco CEO Says Macau Impacted More by Trade Spat Than Protests

To contact the reporter on this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net

To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Bhuma Shrivastava, Colum Murphy

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