Visiting Macau is also getting tougher
The Chinese government says it will fight foreign casinos that try to attract its citizens to gamble outside the country, according to a report in the Casino City Times.
“Some foreign countries see our nation as an enormous market, and we have investigated a series of cases,” said Hua Jingfeng, a deputy bureau chief at China’s Ministry of Public Security. “A fair number of neighboring countries have casinos, and they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This will also be an area that we will crack down on.”
Chinese President Xi Jinping’s crackdown on corruption has effectively chased high rollers out of Macau, resulting in an eight-month losing streak and double-digit declines in gaming revenue. That exodus has caused casino operators around Asia to launch new campaigns to attract high rollers.
Because casinos are not allowed to advertise in Mainland China, operators are promoting the resort cities instead. According to Bloomberg News, one of them, NagaCorp Ltd., which has a casino in Cambodia, is working with travel agencies as well as Macau junket operators to bring in the high rollers.
GGRAsia reports that Chinese travelers are even having a hard time entering Macau. “Since the further tightening of rules on transit visas in January, crossing the border has become increasingly difficult, with some eligible travelers apparently waiting in line for over three hours before being denied entry. We expect this increased scrutiny to have an adverse impact on Macau’s frequent customers,” wrote Daiwa analysts Jamie Soo and Adrian Chan in a note to investors.
In another discouraging sign, despite the Chinese New Year holiday?known as “Golden Week”?Macau’s casino dealers have not been put on standby to work overtime.
“Our take on the leading indicators observed during our recent visit to Macau is that the key Lunar New Year period will be marked by poor liquidity, a decline in player quality, and a drop in frequent customers,” added Soo and Chan. “Forward hotel bookings, a good leading indicator of gaming demand, have fallen. In the VIP segment, some large junket operators have reduced their forward hotel bookings by as much as 50 percent compared with 2014 October Golden Week.”
The trade union Forefront of Macau Gaming estimates that at least 1,000 people who once staffed the city’s VIP rooms have been laid off since July, when the crackdown began.
However, Li Gang, head of China’s Liaison Office in Macau, recently told reporters that the gaming industry will stabilize “very soon.”
“After 10 years of rapid development, the gaming industry has entered an interim development period,” Li said. “Such adjustment is still within expectations. … The adjustment phase is a very good base for the stable development of the gaming industry in the future.”
