After a significant slowdown and even decline, the gambling industry in the Chinese “Las Vegas” Macau seems to appear once again on the gaming scene, marking a considerable growth in gaming revenues for this year. This signals that the gambling venues also start to recover from the crisis, pointing out to the revival of the U.S. casinos with exposure in Macau.
Macau is considered as one of the most important markets on the gaming scene. In 2013, Analyst Tuna Amobi reported that Macau contributed nearly $ 45.3 billion in gross gaming revenues (GGR), which was at its peak. But the formerly booming casino industry started to gradually fade away, as the country’s officials introduced very tight measures. But what really affected Macau’s gaming industry was the severe anti-corruption crackdown, which triggered the exodus of VIP punters.
After the situation cooled down, VIP players seem to gradually return to the Chinese gambling Mecca. As a proof of that, the Macau Gaming Inspection and Coordination Bureau released a financial report, which provided an accurate estimation of the situation. It was reported that the revenue, generated by the gaming activities, has increased with 17.2% for H1 of the year. It is worth to mention that this growth is even ahead of any previous forecasts made by economists. Earlier this year, specialists projected that due to the revival of the gaming industry, Macau’s gross domestic product (GDP) will jump with up to 5.2% in 2017 and 5.3% in 2018.
As reported, the three major U.S. casinos in Macau, including Las Vegas Sands, MGM Resorts and Wynn Resorts, witnessed (and still do) a significant comeback. Las Vegas Sands reported that in 2017 the company’s Macau operations shaped 60% of its consolidated revenues and 52% adjusted property EBITDA (used to analyze businesses for the purposes of evaluation and potential takeover).
A similar report was released by MGM Resorts for the same period, which showed that the company’s operations in Macau present 18% of the company’s consolidated revenues and 16% adjusted property EBITDA. The third major U.S. casino Wynn Resorts reported that its presence in Macau brings 69% of its consolidated revenues and 62% adjusted property EBITDA. The latter company also pointed out that it witnessed a considerable growth of its market share in Macau, currently estimated to be 16%.
Macau is the only place in China, where gambling is legal. Thus, it is not a surprise that its gaming industry is constantly thriving. The Chinese residents, who would like to play are allowed to do so only in Macau. It is yet to become clear how much time it will take for the Macau’s casino industry to completely “reanimate” after facing so much constraints, but the forecast projects a bright future for the trade.
