Representative image (Reuters)
Macau casinos showed further weakness in November as the world’s largest gambling hub heads toward its first annual revenue decline in three years.
Gross gaming revenue was 22.9 billion patacas ($2.8 billion) last month, down 8.5% from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That was slightly better than the median analyst estimate of a 10% fall. Year-to-date revenue is down 2.4%.
Key insights
Macau casinos are heading for their first yearly decline since 2016 as multiple headwinds have thwarted any prospects for a recovery. Here are the biggest obstacles the industry has faced:
The trade war between China and the U.S.
China’s economy at the slowest growth since the 1990s
A weakening yuan that dilutes gamblers’ spending power
Escalating protests in nearby Hong Kong
Rival gaming hubs emerging in Southeast Asia
A crackdown on cross-border gaming that squeezed junkets, hurting the VIP secto
Add one more headache for the latest month: Visa policies to Macau were tightened ahead of the 20th anniversary of its handover from Portugal and an expected visit from President Xi Jinping, according to Credit Suisse Group analyst Kenneth Fong. The restrictions are crimping visitation numbers.
While the short-term outlook is difficult to predict, analysts expect a mild improvement for Macau in 2020, with gaming revenue helped by easier comparisons and some pent-up demand. Estimates are for a 3% increase -- still a long way from the double-digit jumps in 2017 and 2018.
