Macau casino revenue, weighed down by sluggish Chinese economy, hits three-year low
- Gross gaming revenue was down 8.3 per cent in April from a year earlier
- Mainland China provides more than two-thirds of Macau’s visitors
Macau casino revenue fell the most in about three years as China’s sluggish economy continued its chilling effect on high-end customers. Analysts, however, believe the world’s largest gaming hub has seen the worst of the recent slowdown.
Gross gaming revenue for Macau casino operators was 23.6 billion patacas (US$2.9 billion) in April, down 8.3 per cent from a year earlier, according to data from the Gaming Inspection and Coordination Bureau. That was roughly in line with a median analyst estimate calling for an 8 per cent decline.
April’s result, which is far below the double-digit growth seen at this time last year, shows China’s economic slowdown continues to take a toll on casino operators, as the mainland provides more than two-thirds of Macau’s visitors.
Gaming revenue has stagnated in 2019, ending a more than two-year winning streak. The softening trend is expected to ease amid signs that the world’s second-largest economy is stabilising. Analysts predict gaming revenue will grow 2 per cent in May, followed by further momentum in the second half as a recovering credit cycle and stronger mass tourism bring in more gamblers. Although business from high rollers remains weak, the pullback has not been as bad as feared. At the same time, the mass market segment, which contributes a smaller portion of overall revenue, has been showing surprising strength and may become a bigger driver of growth.
Macau casino stocks have been rallying in the face of anaemic revenue growth, amid a more optimistic outlook. The Bloomberg Intelligence index of Macau casino stocks rose 11 per cent in April, extending this year’s gains to 29 per cent. The best performer for April was Wynn Macau, with a 22 per cent gain. MGM China Holdings’ shares performed the worst, losing 1.6 per cent.
