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[SINGAPORE] After a sizzling start to the year, Macau saw its fortunes take a nosedive in June as the world's casino capital experienced its first monthly decline in gaming revenue in five years.
Some observers say that punters stayed away from the roulette tables and jackpot machines in the world's casino capital last month because of the World Cup.
Others say that visitors are not making their way there in droves as before because there aren't any new major attractions opening this year.
Total gross gaming revenue fell 3.7 per cent to 27 billion patacas (S$4.2 billion) last month, the first decline since June 2009 when it fell 17 per cent, according to figures released by Macau's Gaming Inspection and Coordination Bureau.
In the first week of July, the average daily revenue in Macau's casinos was 30 per cent lower than the median of the first half of 2014.
Up until July 6, gaming revenues totalled 783 million patacas per day, down from a daily 1.1 billion patacas recorded in the first six months.
Hong Kong-based gaming analyst Tim Craighead attributed the drop to a number of factors, such as tough year-on-year comparisons, the drought of new capacity and a crackdown on the use of China UnionPay's debit cards.
The director of Asian research at Bloomberg Intelligence also noted how Macau's casinos, having largely focused on the profits from their VIP customers, are gradually shifting their attention towards the mass-market segment of gamblers instead.
Gaming operators, specifically, have their eye on the premium mass-market players, who wager higher amounts than the market average.
This group yields a bigger margin than the VIPs because they don't require casinos to pay commissions to junket operators.
"The mass market business is about three times more profitable than the VIP market," he said in a recent interview with The Business Times.
With the VIP business also being much more volatile, he said that casinos have seen profits from the mass market segment grow more rapidly on a consistent basis, by about 30-40 per cent every quarter for the last four years.
Earlier this month, Fitch Ratings and Barclays cut their estimates for full-year gaming revenue growth in Macau to 10 per cent due to weakness in the VIP segment of the market.
Fitch had previously forecast full-year growth of 12 per cent and Barclays had predicted 13 per cent.
Looking ahead, Macau is gearing up for an unprecedented wave of new integrated resorts, with no fewer than eight mega-projects under construction and will open in rapid succession starting in mid-2015.
For now, however, investors and operators already accept that 2014 will be a "tough year as far as business is concerned", said Mr Craighead.
"Macau has always been about this 'Build-and-they-will-come' story. This has been one of the longest dry spells for Macau in terms of new capacity," he said.