After a Record-Setting Month, the Call of Macau is Loud, but Foreboding
Published September 10, 2018 by Lee R
Macau was just settling into effective regulation, but storm clouds on the horizon could jar the system significantly.
Macau has set a record high in August for gross gambling revenue take.
The Numbers
The 26.559 billion patacas (US$3.319 billion) for the month was reported by the Gaming Inspection and Coordination Bureau (DICJ).
The sterling figures also include a monthly rate of change in August of +17.1%, representing the fourth highest for the year, after January’s +36.4% , April’s i+27.6%, and March’s +22.2%.
The gross revenue totals for the period from January to August amounted to 202.103 billion patacas (US$25.262 billion), for an increase of 17.5% year-on-year increase--the 25th month in a row in which gaming revenue has risen year-on-year.
The market for Macau’s gaming and concession holders had reached 41 casinos at the end of 2018 mid-term, with 22 owned by Sociedade de Jogos de Macau, six by Galaxy Casino, five by Venetian Macau, four by Melco Crown (Macau), two by Wynn Resorts, and two by MGM Grand Paradise. These enterprises sustained a cumulative total of 6,586 gaming tables and 17,296 slot machines.
Robust Performance
The growth comes on the heels of the forced closure of several Macau casinos last August 2017, with even the worst storm to hit Macau in the last 10 years unable to slow gains after flooding city streets and casino floors.
Stock Drop
Nonetheless Macau casino operators have experienced a drop in stock price out of concerns over slowing revenue growth and the spectre of another Beijing-imposed crackdown on corruption that caused the industry slowdown in Macau whose spell was broken in August 2016.
Trade Weapon
Beijing is rumoured to be preparing to penalise the three US operators in Macau--Las Vegas Sands, MGM Resorts and Wynn Resorts—if the trade war with the US ramps up, with Sands owner and primary Trump campaign supporter Sheldon Adelson positioned to take one of the worst hits.
Feeling the Pain
Wynn Resorts Ltd. By early August had already reported steep declines in Q2 results for its casino holding in Macau, driven by a drop in betting from high rollers, and a 31 percent drop in Macau stocks on the Bloomberg Intelligence index from a four-year high in May.
Outlook
The present looks good in Macau, but the future is growing increasingly uncertain, and stakeholders in Macau should study the landscape and integrate the findings into their local strategies before moving forward.
