Macau, the biggest gambling hub in the world is facing a serious crisis as the gambling revenue continued to decline for the 6th consecutive month. Macau’s gambling revenue has been affected by a number of political issues in neighboring Hong Kong and the People’s Republic of China. These issues are yet to be solved and continue to affect the casino industry in Macau.
Reports reveal that Macau’s gambling revenue dropped by 19.6% when compared to November 2013. It was significantly better when compared to October’s revenue which revealed a decline of 23.2%, the biggest drop since 2005. Total revenue from casinos in Macau during November 2014 was estimated to be around $3 billion. Some of the biggest casino brands in the world are set to launch new casinos in Macau during the middle of 2015 and are concerned about the state of the gambling industry in Macau.
Gambling analysts in Macau do not expect the market to change in the coming months and predict that the market will continue to decline in 2015. This is because the economy in mainland China has slowed down but more importantly the crackdown imposed by the Chinese government on black money and corruption has proven to be a huge setback for Macau. This is because the majority of visitors to Macau’s casinos come from mainland China and are usually high net individuals who have loads of money to spend but are not too keen to explain their sources of income.
Standard and Poor recently released a report which confirmed that the new anti-corruption policy adopted by China is having a direct impact on Macau’s casino’s and the decline in gaming revenue. The report stated that the crackdown has scared high net and VIP players from playing the casinos and they are now looking at different markets. Macau will have to find a way to lure these VIP players back to the casinos but it will be difficult unless there is a change in the anti-corruption policy.
The report read
In our opinion, the Chinese government’s anticorruption campaign will have a prolonged impact on VIP market growth in Macau and to a lesser extent the VIP markets across Asia-Pacific…we expect competition for VIP players in the region to intensify due to the impact from China’s anticorruption campaign on VIP demand and weaker arrivals from Chinese visitors…a new VIP casino in Sydney and increased investment in Queensland over the next five years targeting Chinese gamblers will further add to regional competition for VIPs