Macau Gaming Revenue Drops For First Time In 29 MonthsOptimistic Market Unconcerned By 5 Percent Dip |
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For the first time in 29 months, Macau’s gaming revenue dropped.
According to numbers released by Macau Gaming Inspection and Coordination, the largest gambling market in the world fell five percent in January with its casinos taking in $3.1 billion in the first month of 2019. It was the first time in over two years that the region failed to see revenue growth.
Despite the slight drop, the report was still good news for company shareholders with Macau gaming stocks climbing, including a two percent increase by Wynn Macau Ltd. and Galaxy Entertainment Ltd. The optimism comes from the fact that most analysts were predicting a nine percent drop in revenue amidst a pending trade deal between China and the United States, as well as an overall economic slowdown in China.
According to Bloomberg, results show that even with the economic uncertainty, it’s likely that recreational gamblers who make smaller bets are still willing to show up and play. It’s the high rollers that may be staying away from the tables.
“We are encouraged by the January results and view the market as being more robust than it gets credit for,” said Union Gaming Securities Asia Ltd. Analyst Grant Covertson.
There is a general consensus from industry insiders that gaming revenue will ultimately decline in the region, especially as more competition enters into the market. The Philippines generated record gaming revenue in 2018 and countries such as Japan, Cambodia, and Vietnam are also opening up their gaming markets.
With Chinese New Year taking place earlier this week, the casinos are expecting at least a temporary bounce back in revenue. Lawrence Ho, CEO of Melco Resorts & Entertainment Ltd., said that all of the hotel rooms at their three Macau properties are all sold out for the holiday.
Macau casinos pulled in $37.6 billion in revenue during 2018, making it far and away the largest gambling market in the world. It generated more than three times the revenue than that of Las Vegas casinos, the second-largest gambling market on the planet.
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