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Macau gaming watchdog says revenue growth may revive in 2017
[HONG KONG] Macau's gaming revenue may grow next year as casinos' efforts to lure more mass-market gamblers take hold and the city tightens regulations on risky bettors, the industry's top official said.
The imposition of stricter regulations concerning junket operators, money laundering and phone betting this year also are likely to benefit the Chinese territory's business, said Paulo Chan, director of the Gaming Inspection and Coordination Bureau.
"Gaming revenue is expected to see stable development next year, and hopefully go upward," Mr Chan said in an interview at his office.
"Macau has started to see healthy and sustainable growth."
The Macau government has forecast gambling revenue next year of 200 billion patacas (S$35.42 billion), the same amount projected for this year and 13 per cent below the estimates of five analysts surveyed by Bloomberg. The industry ended a 26-month streak of revenue declines in August.
The world's biggest gambling hub subsequently posted four straight months of revenue gains, ending with its strongest growth in almost three years in November as more visitors flocked to local resorts of Las Vegas Sands Corp and Melco Crown Entertainment Ltd. Gaming receipts declined in 2015 and 2014.
Mr Chan said the government's zero-growth projection for next year was "just cautious" because of a slowing Chinese economy, a depreciating yuan and the uncertainties of a new US presidential administration, he said. Donald Trump, who once ran four casinos with his name on them, has been critical of China's currency and trade policies.
Mr Chan became overseer of Macau gambling last year after about two decades in the government prosecutor's office.
Casino operators are taking a page from Las Vegas by trying to attract more families and casual gamblers instead of relying on high-stakes bettors. That comes after President Xi Jinping told Macau to vary its economy amid China's efforts to curb corruption by public officials and limit capital outflow.
"We will work more on economic diversification," Mr Chan said.
"If we only rely on a small group of VIP patrons, we are at risk when the economy fluctuates."
Wynn Resorts Ltd opened the Wynn Palace, featuring a US$100 million water-fountain show and gondola ride, while visitors to Las Vegas Sands' Parisian take selfies in front of its half-size replica of the Eiffel Tower. The number of visitors from China increased 6.9 per cent during October's Golden Week holiday.
"The additions are key to the city's revenue recovery and long-term growth," Margaret Huang, an analyst for Bloomberg Intelligence, said in a note published Wednesday.
"The new resorts have lured more mainstream business and enticed longer stays."
Mr Chan also is trying to reduce the risks from inside the industry. Junket operators, who organise trips for gamblers from China and often provide loans for betting, must adhere to stricter accounting standards in order to keep their licenses for 2017. Macau will soon publish plans to raise capital requirements for promoters and set up a credit database to weed out risky gamblers, he said.
As part of its money-laundering efforts, the city in May banned the use of mobile phones at gaming tables to prevent anonymous betting from outside the hub. It also will require inbound travellers to disclose cash holdings of more than 120,000 patacas upon entry, according to state-owned broadcaster Teledifusão de Macau.
"After gaming revenue slumped for more than 20 months, the industry has learned the importance of healthy development," Mr Chan said.
"We will continue to prescribe in the current direction. It doesn't seem necessary for a heavier dose of medicine."