Dealers stand at sic bo tables inside the Galaxy Macau Phase 2 casino in Macau, China. PHOTO: BLOOMBERG NEWS
Macau Gambling Revenue Falls for 13th Straight Month
Anticorruption measures and visa policies are among the factors blamed for the dramatic slump in the Chinese casino hub
Macau’s gambling revenue fell 36% from a year earlier to 17.36 billion patacas ($2.17 billion) in June as the world’s casino capital continued to wither under pressure from China’s crackdown on corruption.
June’s performance marks the 13th straight month of declining gambling revenue in the Chinese territory, according to government data released Wednesday. Over the first six months of 2015, revenue has fallen 37% from the same period last year, including a record 49% drop in February. The losing streak follows five years of uninterrupted growth.
Executives and analysts attribute the dramatic slump primarily to a crackdown on corruption led by China’s president, Xi Jinping. In addition to bringing down many top mainland officials, the sweeping campaign has scared off high-rollers, they say.
Other factors that have hurt Macau’s gambling revenue include increased oversight of UnionPay cards that many gamblers use to access funds in Macau, new smoking restrictions at casinos and tighter visa policies for mainland Chinese visitors to the territory.
While the government continues to push for a full smoking ban that would outlaw even the smoking lounges that casinos created to comply with the current restrictions, it also this week announced that, effective July 1, it would relax the visa restrictions it introduced a year ago.
Credit Suisse analysts Kenneth Fong and Isis Wong called the visa news, which caused casino stocks to rally, a positive policy signal in a Tuesday report.
Analysts at Wells Fargo disagreed. “We don’t think this policy announcement signals a sustained shift in China’s policy toward Macau, or an easing in the anti-corruption campaign,” wroteCameron McKnight and Tiffany Lee of Wells Fargo in a Tuesday report. “If China is trying to drive Macau revenue growth down to a longer term growth rate of 10% or so, monthly revenues could have another 10% of downside,” they warned.
Write to Kate O’Keeffe at Kathryn.OKeeffe@wsj.com
http://www.wsj.com/articles/macau-gambling-revenue-falls-for-13th-straight-month-1435733412
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