Macau Feb gaming revenue slumps record 49% as rich Chinese stay away

[HONG KONG] Gambling revenue in Macau, the world's biggest gaming hub, plunged by a record 49 per cent in February, as wealthy players shied away from China's only legal casino hub following the economic slowdown and Beijing's crackdown on conspicuous spending.

Revenue fell for the ninth consecutive month to 19.5 billion patacas (US$2.4 billion) in February, from 38 billion patacas a year earlier, according to data released by Macau's Gaming Inspection and Coordination Bureau.

Analysts were expecting a decline of 45 per cent to 55 per cent. "We believe the biggest culprit for the weak month was the already-troubled VIP segment," said Grant Govertsen, analyst at Union Gaming Research Macau. "Ultimately, while we believe there was a pickup in VIP headcount, gaming volumes just weren't there." A crackdown on corruption led by President Xi Jinping, which also targets the illicit outflow of money from China, could be blamed for the revenue decline in the southern Chinese territory of Macau, according to casino executives and analysts.

Hong Kong listed Macau casino stocks rose between 1 per cent and 3.5 per cent on Tuesday as the revenue figure was within the range expected by analysts. Shares have dropped 4-9 percent since the start of this year, sharply underperforming the benchmark Hang Seng Index, which was up 5 per cent for the same period.

The six licensed casino operators Sands China Ltd, Galaxy Entertainment Group Ltd, Wynn Macau, SJM Holdings, MGM China Melco Crown have taken a beating as outlook and investor sentiment weakened.

While revenue from Macau, a special administrative region like neighboring Hong Kong, still remains more than 7 times that of Las Vegas, a slowdown is highly visible within the former Portuguese colony's 35 casinos.

During a recent visit by Reuters to four of the city's glitziest casinos, VIP rooms were mostly desolate.

Analysts also expect the slowdown to lead to more closures of junket operators, the companies that arrange credit, accommodation and travel for wealthy players. "Notably, there were a number of mass tables empty on the third and fourth days of CNY (Chinese New Year)," said Wells Fargo analysts in a research note dated Feb 27.

REUTERS