While online poker companies across the globe find it harder to survive due to strict online poker regulations, brick & mortar casinos have also witnessed a slump in revenues. Last month Atlantic City recently announced the closure of some of its popular casinos including Trump Taj Mahal and this month Macau is reporting one of the biggest declines in revenue across all its casinos.
Macau is considered the biggest gambling attraction in the world and is home to just about every casino and brand in the world.
Macau which is an hour away from Hong Kong and mainland China overtook Las Vegas in revenues a number of years ago and makes nearly 60% of its revenue from high stake games and high profile players.
Apart from attracting professional poker players and tourists from across the globe, Macau receives a steady flow of mainland Chinese residents who cross the border to play at the casinos and relax. The recent pro-democratic protests in Hong Kong have posted numerous security challenges and most of mainland China prefers to stay away due to security threats.
Francis Tam, the Secretary for Economy and Finance in Macau recently confirmed that total casino revenue dropped by as much as 12% in September, bringing down total cash revenues to $3.2 billion. The decline in Macau casino revenue started in June 2014 and since then Macau casinos have not been able to arrest the decline.
While the protests in Hong Kong also referred to as the ‘Umbrella Revoultion‘ have contributed to the decline in September, there are other factors that have resulted in dip in Macau casinos revenue. Chinese President Xi Jinping’s launched a campaign to clean up China and the authorities are focusing on black money. A number of wealthy Chinese nationals love to gamble at Macau and spend their money freely but this crackdown has caused to be cautious and lie low for now.
Macau has also reduced the length of the tourist visa for Chinese nationals bringing it down to 5 days from the initial 7. The recent ban on smoking has also not gone down well with most gamblers who visit Macau as they are used to the liberal laws that allowed them to visit Macau and do as they please.
From the 1st to the 7th of October, mainland China goes on vacation due to a long national holiday and a number of Chinese nationals go to Macau to gamble. The protests and safety issues will ensure that Macau gets limited visitors in October which will most likely result in another month of low revenues.