Government stepping in
August is usually a good month for the gaming industry in Macau. But for the month just ended, the numbers were less than encouraging. Casinos saw revenues drop 35.5 percent year-on-year to MOP18.6 billion (US$2.3 billion). As reported by Forbes, junket betting volumes decreased 54 percent and VIP revenue dropped 40 percent. Mass revenue fell 25 percent.
In response, Xinhua, China’s official news agency, says the government could spend up to 1.5 trillion yuan (US$235 billion) to jumpstart investment projects over the next three years.
The Macau Business Daily reports that the economy overall in Macau is contracting, with second-quarter GDP down more than 26 percent. Jose Felix Pontes, who recently retired from the board of the Macao Monetary Authority, told the newspaper, “Macau’s economic-financial dependency upon casinos will continue for many, many decades.”
The website Gamblingheadlines.net cites the oft-repeated reasons for Macau’s historic decline: a slowing Mainland economy, weaker currency, limits on smoking in casinos, and “governmental red tape,” along with the campaign to apprehend and punish anyone engaging in money laundering in the world’s premier gaming destination.
As the jurisdiction works to diversify its economy, Las Vegas-style, industry analysts predict a 10 percent long-term growth rate once the market stabilizes.
