After an impressive growth of 36.4 per cent in January, gambling revenue in Asia’s bustling casino centre Macau rose only 5.7 per cent in February. The rate is lower than analysts’ forecast for the month, showing a decline in the sector despite the expected rise in visitors numbers for the holiday season.
Casino revenue rose to 24.3 billion patacas ($3 billion) in February, a year-on-year growth of 5.7 per cent, revealed data from Macau’s Gaming Inspection and Coordination Bureau on Thursday. Compared to the same period in 2017, revenue jumped 36.4 per cent in January, which was the largest increase on an annual basis in nearly four years.
Despite the overall growth in February, the figures are rising at a slower pace than analysts expected for the holiday period starting on February 15 with the Chinese New Year. According to an earlier Bloomberg estimate, revenue generated from gambling operations in Macau, which is the only place in China where casinos are legalized, was expected to rise at a median rate of 9 per cent. Meanwhile, according to preliminary government figures, the numbers of visitors during the national holiday week were up 6.5 percent.
It is precisely the rise of tourists and families visiting Macau during the holiday that has become the reason for the slower growth, according to Bloomberg. High-rollers, says the edition, have stayed away from casinos in the autonomous Chinese territory in order to avoid the crowds during one of the biggest spending periods in the country.
Positive Projections for Macau Gaming Market in the Long Term
Earnings from gambling have seen a healthy growth in 2017 after plunging to record lows due to the slower economic growth of the former Portuguese colony. The government crackdown on corruption also had a huge impact on the gambling industry in Macau, which has dwarfed Las Vegas in recent years in terms of both revenues and visitor numbers, becoming the world’s largest gambling market. In the summer of 2017, a top Macau prosecutor was found guilty of corruption, while casino shares fell to their lowest levels for the past four or five years.
Gambling revenues are still lower than the record-high figures in 2014, but the effect of the anti-corruption measures is already diminishing. There has been a steady rise in the gambling demand even if some high-rollers are still shying away from casinos on the Cotai Strip. In the meantime, Macau is trying to diversify its entertainment offerings, expanding leisure facilities, dining and retail options. New infrastructure projects such as the bridge connecting Hong Kong, Macau and neighbouring city Zhuhai, which opens in July, will also contribute to the overall development of the city.
This economic growth will most likely drive an even greater gambling demand, attracting larger numbers of casual gamblers and high-stakes players. This will boost casino revenues and by 2022, gross gaming revenue in Macau may reach $60 billion, analysts from Morgan Stanley predict.
