Francis Tam
Francis Tam forecast the city’s drop in casino revenue will worsen this month and a recovery will come in the second half of next year.
“In October, the decline on [gaming] revenue will be higher than that was recorded in September; which is the only thing I can say. Last month, Macau’s casino gaming revenue dropped by 11.7 percent; [for October] we predict that [the decline in revenue] will be greater,” the Secretary for Economy and Finance Francis Tam said on the sidelines of the 19th MIF. He added that we still have one week until the end of the month, so there’s a need to further assess the matter.
Francis Tam recalled that a consecutive drop in gaming revenue over the past few months does not mean the economy is not as stable as before. He recalled that other factors point to stability and economic growth, such as an increase in the number of tourists visiting Macau, as well as an increase in retail sales. “In the past four or five months, we’ve seen gaming revenues decline, but we understand that there hasn’t been a drop in the number of tourists – there was even an increase – and many tourists come here not only to gamble. They stay in hotels, go to good restaurants, and buy luxury goods – therefore, they are enjoying our leisure-related offerings,” he stressed.
A new bridge connecting Macau, Zhuhai and Hong Kong, coupled with the new casinos opening next year, will increase the city’s capacity to handle tourists, the official was also cited as saying.
Chinese President Xi Jinping’s crackdown on corruption has dented spending by high rollers in Macau, the only place in China where casinos are legal. Pro-democracy demonstrations in Hong Kong may have caused mainland Chinese to defer their usual joint Hong Kong-Macau trips during China’s weeklong holiday, according to Grant Govertsen at Union Gaming Group.
Macau’s Casino revenue this month could drop 20 percent to 23 percent from a year earlier because of China’s anti- corruption drive, a pull-back in credit and a softening housing market, Cameron McKnight, an analyst at Wells Fargo & Co., said in a note this week.
In September, total casino revenue declined 12 percent, the steepest drop since June 2009, to MOP25.6 billion (USD3.2 billion).
Wynn Macau Ltd. led casino shares lower, dropping 1.8 percent to HKD27.10 in Hong Kong. Galaxy Entertainment Group Ltd. lost 0.8 percent and MGM China Holdings Ltd. fell 0.9 percent. Sands China Ltd. rose 0.2 percent. MDT/Bloomberg
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