Macau Gaming Revenue Rebounds Slightly In FebruaryChina's Shaky Economic Outlook And Slowed VIP Activity Hindered The Region's Once Unstoppable Growth |
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After its first dip in over two years, casinos in Macau rebounded from a decline in gambling revenue in January with a slight increase in February.
Its casinos generated $3.17 billion in revenue, up slightly from January’s $3.1 billion win from its gamblers. It’s a 4.4 percent increase year-over-year from last February’s numbers, which matches expectations for the industry in Macau.
During the Chinese New Year season, however, a period that is tracked through parts of both January and February, revenue fell flat with a slight decline of 0.5 percent. Just like in January, the decline stems from a dip in high roller action, while the smaller gamblers are still making it to the casino at a typical rate.
In the week following the Chinese New Year, the Macau Daily Times reported that VIP activity rose by a whopping 32 percent year-over-year. Outside of the holiday season, the high rollers just aren’t gambling as much as they were.
Many casinos in the area have extended their smoking ban to the high roller areas of the casino, which is another factor in the decline of VIP activity.
Vitaly Umansky, a Senior Analyst at the brokerage firm Sanford Bernstein, told Forbes that China’s shaky economic outlook may have contributed to Macau’s flattened gaming revenue.
In 2018, Macau-centric casino stocks lost a quarter or more of their value and they have yet to regain those losses. They have yet to regain those losses this year and China has already lowered their GDP growth forecast from 6.5 percent to six percent. That would be the nation’s smallest increase in GDP in 29 years.
The looming threat of a trade war between China and the United States could also hinder Macau’s revenue.
Despite the clouds hanging over Macau’s gaming landscape, Sanford Bernstein is still projecting between two and five percent growth for gaming revenue in Macau in 2019.
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