Macau Gambling Revenue Experiences Third Consecutive Month Of Growth
After experiencing 26 months of consecutive decline, Macau’s casino industry started its recovery in August 2016 and since then has continued its recovery process.
The Gaming Inspection and Coordination Bureau confirmed that the casino industry had its third consecutive month of revenue growth in October as combined revenues brought in $2.726 billion which was an 8.8 percent increased compared to October 2015.
Macau’s casino industry was rocked in 2014 after Beijing launched an anti-corruption crackdown targeting Macau’s casinos and its VIP clientele.
The crackdown caused the collapse of the VIP market segment which contributed to more than fifty percent of the casino industry’s gross gaming revenues (GGR). Macau’s government instructed the six major casino operators to adopt a new business model that focused on non-gaming activities and mass market gamblers.
Throughout the 26 months, most of the major gambling operators continued to remain positive that Macau’s casino industry would experience a turn around. While the VIP market segment is yet to see a recovery, overall gaming revenues have started to pick up thanks to the opening of two new multi-billion dollar casino resorts in the Cotai District.
Wynn Resorts opened its $4.4 billion Wynn Palace in August and the Las Vegas Sands Corp opened its Parisian Macau casino which cost over $2 billion in September and both resorts have helped with the increase in GGR. The number of visitors to Macau has already increased in recent months and the visitor spike has been attributed by analysts to the opening of these two new billion dollar resorts.
Chinese authorities recently arrested 18 Crown Resort employees and 10 junket operators from different parts of the country for allegedly luring Chinese gamblers to Australia to gamble at Crown Resort casinos. This violates the existing gambling law as casino operators are not allowed to market or promote their casinos and take revenue spending out of China. The crackdown on Crown Resorts caused concerns in the Australian market and resulted in a drop in share prices for both Crown Resorts and Australian competitor Star Entertainment.
There were initial fears that the crackdown would once again negatively impact Macau’s casino industry and put a halt to the recovery process. Macau’s casino regulator met with the six gaming operators as a precaution and asked them to fully comply with all gaming laws so that the authorities have no need to turn their attention towards Macau. So far the crackdown has only focused on overseas recruiting and not targeted Macau’s casinos.
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