Macau slashed its monthly gambling revenue forecast 27 percent, as the city’s chief executive pledged a five-year plan to make the world’s largest gaming hub less dependent on casinos.
The city expects average gross monthly gaming revenue of 20 billion patacas (USD2.5 billion) this year, down from an earlier estimate of 27.5 billion patacas, Chief Executive Chui Sai On said in the first policy of his second-term. Macau has entered an “adjustment” period of slower growth and needed to develop a broader range of attractions to draw tourists from around the world, he said.
“Even though the economy has faced major difficulties and challenges, the overall fundamentals of the economy are good,” Chui told lawmakers. “The pace of the economic growth has slowed, prompting us to accelerate economic diversification.”
Chinese President Xi Jinping has called on Macau to move beyond gambling as his corruption crackdown and a slowing national economy keep high rollers and middle-class patrons alike away from gaming tables. Gaming revenue is expected to fall for a second year, battering the local economy and the share prices of casino operators such as Sands China Ltd. and Galaxy Entertainment Group Ltd.
Chui’s tourism panel would draft a five-year plan for stable casino growth while expanding the city’s tourist offerings, the chief executive said. The MSAR government will evaluate the development of the gaming industry since ending local casino mogul Stanley Ho’s monopoly in 2002 and opening casinos to foreign operators, with the goal of strengthening oversight.
The government also plans to improve airport facilities and expand airline services, Chui said. Macau’s economy shrank 17 percent in the final quarter of last year as casino revenues slipped 2.6 percent, the first such annual decline.
According to the median estimate of nine analysts surveyed by Bloomberg News in January, gaming revenues would probably drop another 8 percent drop this year. The most pessimistic expected a 21 percent decline.
The new projection provided by Chui yesterday would represent a 32 percent decline from last year’s average of 29.3 billion patacas, according to data from Bloomberg Intelligence.
Diversifying Macau’s economy would take 20 to 30 years and the city should accelerate efforts, Li Gang, director of the Chinese government’s local liaison office, said this month.
Chui’s administration would also submit a proposal to the central government to improve the travel policies for mainland Chinese tourists, the chief executive said.
Macau’s Secretary for Social Affairs and Culture Alexis Tam said in February that the city wants to study curbs on mainland tourists to ease overcrowding. The city saw 31.5 million tourists last year with two-thirds coming from the mainland, according to city data.
Shares of Macau casino operators have plunged almost 50 percent over the past year, according to the Bloomberg Intelligence Macau China Gaming Market Competitive Peers Index. The gauge comprises the stocks of all six major casino operators in the territory. Stephanie Wong and Fox Hu, Bloomberg
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