Despite its apparent geographical and being considered an economic enclave, Macau has been hard hit by China crackdown on upscale spending Macau’s casinos recorded their worst year, ending a decade of expansion that turned the former Portuguese enclave into the world’s biggest gambling hub. More tough times are ahead.
Casino revenue in the city fell 2.6 percent to 351.5 billion patacas ($44 billion) in 2014, after a record 30.4 percent monthly drop in December, according to figures from Macau’s Gaming Inspection and Coordination Bureau today. Analysts projected a 2 percent annual decline, based on the median of nine estimates in a Bloomberg News survey.
Chinese President Xi Jinping’s bid to catch “tigers and flies” in an anti-corruption drive and weaker economic growth means Macau may face shrinking revenue until at least mid-2015, when new resorts open. The crackdown has deterred high rollers who account for two-thirds of Macau’s casino receipts, and wiped out about $73 billion in market value of companies including Wynn Macau Ltd. (1128) and SJM Holdings Ltd. last year.
“The VIP heyday is over,” said Philip Tulk, an analyst at Standard Chartered Plc in Hong Kong. “The anti-corruption crackdown doesn’t look to be a short-term phenomenon,” with funds flows between the mainland and Macau being much more closely scrutinized, he said.
Casino revenue fell to 23.3 billion patacas in December for a seventh straight month of decline and the biggest drop since Macau began recording monthly figures in 2005. That compared with a median estimate of a 30 percent drop in a Bloomberg News survey of 11 analysts. Macau had posted its smallest annual casino revenue gain of 9.7 percent in 2009, after it began yearly records in 2002.
As the only Chinese city where casino gambling is legal, Macau has seen the industry’s revenue expand 8.5 times since the 2004 opening of its first foreign casino owned by billionaire Sheldon Adelson, after the government ended local gambling mogul Stanley Ho’s 40-year monopoly.
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