Meetings & Information


Thursday, March 19, 2015

Chinese Corruption Crackdown Put Macau in Recession

Interesting connection between illegal money transfers, corruption and gambling.....

The Zacks Analyst Blog Highlights: Wynn Resorts, MGM Resorts International, Las Vegas Sands and Melco Crown Entertainment - Press Releases

By ,

No Respite for Casino Stocks as Macau Slump ContinuesIt seems that the situation in the gambling industry is going from bad to worse. Share price of leading casino companies were hit during the trading hours on Monday as economic data released by the Statistics and Census Bureau (DSEC) demonstrated weakness in Macau - a key operating region for these casino companies. Companies that were impacted by the release include Wynn Resorts Ltd., MGM Resorts International, Las Vegas Sands Corp., Melco Crown Entertainment Ltd.

What Led to the Decline in Macau?
Per analysts, as Macau started to grow, it focused on casinos, instead of diversifying into other areas. Since more than 80% of the government's revenues come from gaming, the economy is closely tied to the gambling industry.

As a result, when the Chinese government announced a crackdown on corruption in Macau in 2014, VIP gamblers either opted to refrain from gambling or tried their fortunes elsewhere. This lowered footfall at the local casinos, and thereby gambling revenues. Also, a cooling Chinese economy, political unrest and a smoking ban on mass market gaming floors compounded woes.

Read more:

No comments: