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Macau's gambling revenue drops 34.5% in July
[HONG KONG] Gambling revenue in Macau fell 34.5 per cent in July from the previous year, hovering around five-year lows as wealthy Chinese punters stayed away from the world's biggest gambling hub.
The decline, however, was narrower than the 36 percent drop in June and in line with analysts estimates for a fall of around 34-35 percent.
Gambling revenue fell year-on-year to 18.6 billion patacas (S$3.16 billion), according to data released by the Macau government on Monday. In June, revenues fell to 17.4 billion patacas.
Macau is the only legal casino hub in China, and the mainland accounts for nearly 70 per cent of all visitors to the special administrative region, but gambling revenues have fallen for the past 14 months amid a broader government crackdown on corruption.
VIP customers, who once accounted for the bulk of gaming revenues, have stayed away from Macau to avoid scrutiny, say junket agents who organise these gamers trips. Some have also been hard hit by China's slowing economy, the agents added. Despite this drop, the former Portuguese colony still rakes in over 5 times more than rival Las Vegas.
The decline, in addition to infrastructure delays and growing competition from other Asian casino hubs, has pressured gaming stocks, including Sands China, Wynn Macau , Galaxy Entertainment, SJM Holdings, Melco Entertainment and MGM China.
The stocks have fallen between 10 per cent and 28 per cent so far this year versus a 3 per cent gain in the benchmark Hang Seng Index.
Macau media had quoted Lionel Leong, secretary for Economy and Finance, as saying the government would look into implementing austerity measures should revenue drop below 18.35 billion patacas.
Analysts expect revenues to improve in the second-half of the year due to the opening of Melco's Studio City integrated resort, which will feature a ferris wheel and Batman-themed amusement ride, but caution that betting from wealthy gamblers is likely to remain subdued.
Government data shows the share of VIP gaming revenue fell to 55 per cent in the second quarter from around 70 per cent before early 2014.