Under orders to increase non-gaming revenues
Macau’s gaming industry marked 23 consecutive months of decline in April, but the revenue numbers indicate signs of stabilization, say some analysts.
Gross gaming revenues for the month were down 9.5 percent year-on-year, for 23 consecutive months of decline. But Bloomberg analysts who predicted a 13.5 percent drop say it’s a sign of stabilization as casinos reduce their reliance on VIPs and pivot toward the casual gambling market and other tourist amenities.
Collectively, Macau casinos have been in a downward spiral since June 2014, when Chinese President Xi Jinping declared war on corruption and graft in the gaming city. That campaign, coupled with a slowing economy, drove out high rollers and started the decline that will be two years old next month.
“The casinos produced another reasonable monthly revenue performance in what is a seasonally slower shoulder month,” said Bloomberg’s Tim Craighead. “It still looks to us that the business is stabilizing and the next big catalysts to watch for are the summer travel season and the new resorts from Wynn Macau and Sands China.”
The city government has published a five-year plan calling on casino operators to increase their non-gaming income to 9 percent of total revenues by 2020; the casinos derived just 6.6 percent of revenues from non-gaming in 2014.
SJM Managing Director Angela Leong On Kei and Wynn Macau Executive Director Linda Chen told the Macau News that the city’s six gaming concessionaires need to pull together to shift from reliance on high-roller play to a more diversified economy.
“As long as we cooperate with each other, I believe we will achieve it. The government has set the goal. I think the six gaming companies will give their vigorous support,” Leong said.
“Every company in Macau should follow the overall direction the government has given us, continue to work together and keep increasing the percentage,” added Chen.
