Rough Times Ahead For Macau’s Casino Gambling Industry

Rough Times Ahead For Macau's Casino Gambling Industry

Macau’s casino gambling industry is battling with slumping revenue for over a year. While things don’t seem to be easy, there are several factors that could further worsen the situation for Macau’s gaming industry.

Analysts have predicted a dry fourth quarter for Macau as far as the revenues from casinos are concerned. According to Morgan Stanley, a financial analytics company, Macau will struggle to post positive revenue growth in any of the three months in the final quarter of the year.

Analysts Praveen Choudhary, Thomas Allen, and Gareth Leung said that October GGR would be 6% down year-on-year. They also said that November and December would post a 9% decline year-on-year.

“We expect Q4 revenue growth for both mass and VIP to decelerate compared to the first nine months in Macau. Driven by high [2018] base, lower [tally of] overnight visitors and general economic slowdown,” the analysts said.

There have also been claims challenging the hype about a slowdown in Macau’s casino gambling industry. According to the latest figures released by the Macau Financial Services Bureau (FSB), the city’s casino gambling industry chipped in an impressive $9.49 billion in tax revenue between January and August 2019. The figures also represent a 1.5 percent year-on-year increase in tax contributions made by Macau casinos.

Surprisingly the surge in tax contribution comes even when the gross gaming revenue (GGR) of Macau has dropped 1.9% across the first eight months to August 31.

According to the latest figures released by Macau’s gambling regulator, the casinos in Macau managed to post a positive result after two months of consecutive decline. Macau casinos made MOP22.08bn ($2.73bn) in revenue for September. The figure represents a nominal 0.6% year-on-year for the month.

Macau casino gambling sector was expected to pick up in the second half and it was expected that the gambling revenue would jump by about 1 to 3 percent year-on-year.

Moreover, the GGR for Macau in September fell 9 percent, month over month, which is the biggest biggest percentage drop in 27 months.

In accumulated GGR, Macau is still 2% down, although the exact deficit decreased in September.

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