Investment bank Nomura says early checks show Macau casino revenue on a pace to fall by 6 percent – 10 percent year on year in September.
If the forecast proves correct, it would be the fourth month in a row that gaming revenue has declined compared to last year. That would make it the most sustained retreat since the 2008-2009 global financial crisis.
As in previous months, the culprit is expected to be market-wide weakness in VIP, which accounts for around 60 percent of the casinos’ aggregate take. Nomura’s data suggests VIP revenue could decline by as much as 24 percent compared with September 2013. VIP was down 19 percent in August and 20 percent in July.
It isn’t helping that September revenues tend to be seasonally weak anyway ahead of the busy October 1-7 “Golden Week” holiday.
On the plus side, September mass revenues could be up about 15 percent – 19 percent, Nomura said.
In all, the bank expects total 2014 revenue may exceed 2013 by only 2 percent – 3 percent, versus current consensus of 3 percent – 6 percent.
There is no consensus on the reasons for the slump, however. Most analysts point to President Xi Jinping’s aggressive crackdown on corruption as the main driver. Falling property values on the mainland are also having an impact, they say. A recent tightening of visa requirements for the mainland’s Macau-bound gamblers is also taking a toll, according to some.
