Gaming industry slump eases a fifth month as visa rules abate

The downward spiral of Macau’s casino industry is abating, albeit slightly, as a revenue slump eased a fifth straight month in July, the same month the city relaxed rules for Chinese citizens entering the gambling hub.
Gross gaming revenue fell 34.5 percent to 18.6 billion patacas (USD2.3 billion), according to data released by Macau’s Gaming Inspection and Coordination Bureau.
The world’s largest gambling hub has seen revenue decline since June 2014, hurt by an economic slowdown in China and Beijing’s anti-graft campaign that deterred high-stakes gamblers. Starting July 1, local authorities allowed mainland China passport holders to visit more frequently and stay longer, a surprise easing of entry rules that gave hope it would be the first of more supportive policies.
“We haven’t seen a firm stabilization yet,” said Tim Craighead, an analyst with Bloomberg Intelligence. “The second half of the year has a good chance to see a revenue inflection, with new resorts coming on stream and Chinese stimulus measures hopefully supporting consumer activities.”
Wynn Macau Ltd. tumbled 4.6 percent to HKD15.28 by the close of trading in Hong Kong with MGM China Holdings Ltd. dropping 3.7 percent, and SJM Holdings Ltd. and Galaxy Entertainment Group Ltd. both down 2.8 percent. Sands China Ltd. lost 1.2 percent. The Hang Seng Index fell 0.9 percent.
Gross gaming revenue has fallen 36.7 percent year-to-date, and may fall 30 percent for the whole of 2015, according to the median estimate of 11 analysts surveyed by Bloomberg. The industry is expected to rebound with a 4.5 percent gain in 2016, according to the median estimate of 10 analysts.
The industry’s decline has been easing since February when revenue plunged by a record 48.6 percent, and sets “a trend we expect to continue through the remainder of the year,” Sterne Agee CRT analyst David Bain wrote in a note on July 27.
Casino operators are hoping a wave of new resorts will draw tourists and gambling revenue back to Macau, with Galaxy opening two new gambling resorts in May, marking the city’s first new casino projects since 2012. Melco Crown Entertainment Ltd. is expected to announce an opening date for its $3.2 billion Studio City resort this week.
Billionaire Steve Wynn said last week he felt “sanguine” about prospects for the new Wynn Palace project, his company’s second casino in Macau, setting a March 25 opening date. Sands China’s Parisian Macao is scheduled to open in about 12 months from July, according to Chairman Sheldon Adelson.
Macau’s economy has been hit by the gambling downturn, with real gross domestic product falling 0.4 percent last year, the first annual decline since 1999, the Monetary Authority of Macau said in a July report. Output is expected to shrink “at a rate of mid teens” this year, the authority wrote. Bloomberg