Macau casino revenue declines for the second consecutive month, the first time since 2004. Is there real reason for concern?
Macau is still the world leader in casino gambling revenue by far but things aren’t looking as rosy as they were in early 2014. Fresh off a $45.2 billion year, the Macanese casino industry looked like nothing could come between it and world domination.
Then, gambling news was only good news. But half a year in, things like the auditing of junket operators and restrictions on debit card transactions have stemmed the flow of VIP gamblers to Macau, cutting into casino revenue.
In July, total revenue came in at $3.6 billion, down 3.6 percent from the same period in 2013. That comes after year-on-year June revenue fell by 3.7 percent, the first such fall since 2010.
Do consecutive disappointments spell disillusionment with Macau?
If we annualized the monthly revenue for July we get $43.2 billion, which would be first year-on-year decline for Macau since the casino industry launched in 2004. It’s still too to tell if that will indeed happen, but investors have reason to curb their enthusiasm concerning the market.
The government restrictions on VIP players don’t look to be going away anytime soon, and local officials recently announced they will impose a smoking ban in all casinos, which could further depress revenue.
And Macau could soon face competition from a neighbor to the north. If changes to Japanese gambling laws come into effect, casinos could open up there in a few years.