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Macau gambling revenue falls 3.3 pct in 2016, 3rd year in a row
January 1, 2017 / 8:22 AM / 9 months ago

Macau gambling revenue falls 3.3 pct in 2016, 3rd year in a row

HONG KONG (Reuters) - Gambling revenue in the Chinese territory of Macau fell for a third year in a row in 2016 as a prolonged anti-corruption campaign and slowing economic growth sapped sentiment in the world’s largest casino hub.

Gambling revenue fell 3.3 percent to 223.2 billion patacas ($28.0 billion) last year, government data showed on Sunday, in line with analyst forecasts of a drop of 3 percent to 4 percent.

However, December revenue rose 8 percent from a year earlier to 19.8 billion patacas.

New casino resorts, which opened in the third quarter, helped attract mass gamblers and spark a resurgence in VIP spenders who have steered clear since Chinese President Xi Jinping rolled out his campaign against corruption at the start of 2014.

Analysts have called a bottom to Macau’s gaming industry amid a perception that the campaign is waning and the southern Chinese enclave is no longer a top priority for the central government.

But they remain mixed on the sustainability and pace of recovery in 2017 for operators Sands China (1928.HK), Wynn Macau (1128.HK), Galaxy Entertainment (0027.HK), MGM China (2282.HK), Melco Crown MPEL.O and SJM Holdings (0880.HK).

“Macau gaming, now firmly at the bottom of the cycle, has better long-term prospects given investments in new supply, improvements in mass market indicators and under-penetration of gaming throughout the rest of Asia,” said Fitch in a December note.

A specially administered region, Macau is the only place in China where casino gambling is legal.

The latest wave of casino properties is set to open in Macau from 2017, with The 13 Holdings and MGM, followed by SJM’s casino in 2018. The new resorts come as Macau faces increasing competition from neighboring casino hubs including Saipan, the Philippines, Cambodia and South Korea.

Local authorities have been trying to push the development of non gaming amenities to make the former Portuguese enclave less reliant on casinos, which contribute more than 80 percent of government revenues.

The build-out of neighboring Hengqin island and developments including a new ferry terminal, increased rail links and a bridge linking Macau to Hong Kong and the mainland province of Zhuhai are expected to help increase visitation to the former Portuguese enclave over the next few years.

($1 = 7.9790 patacas)

Reporting by Farah Master; Editing by Richard Pullin

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