International edition
September 17, 2021

A 3.6 percent decline

Macau takes hit as casino revenues decline for second consecutive month

(Macau).- Gaming revenue fell in July for the second straight month. It dropped to USD 3.56 billion, a 3.6 percent decline year on year, according to official results. Coupled with June’s 3.7 percent drop, which was the first year-on-year decline in five years, the perception is growing that the boom is headed into a period of uncertainty.

We continue to believe 2014 will be choppy as VIP growth likely remains weak into fourth quarter and we haven’t seen a sustained improvement in revenues post World Cup,” Wells Fargo analyst Cameron McKnight said in a client note. China’s anti-corruption campaign “could impact player sentiment and spending,” he said.

“As we had expected there was no meaningful post-World Cup bounce and our view remains that the primary driver of VIP weakness is political in nature,” brokerage Union Gaming Research Macau said.

Mass-market revenue, on the other hand, continues to track at a rate approaching +30%, and that’s good news, given that mass play generates around 70% of casino operating profit. With no junket middlemen to cut in for upwards of 40% of the win, the sector is about four times more profitable than VIP.

To capitalize, casinos have been shifting resources toward cash play. Sands China, for one, cut the number of its VIP tables by 28% in the quarter ended 30th June 30, reallocating them to the cash floor.

In all, forecasts now are that total gaming revenue will grow in the single digits this year after a 10% increase over the first seven months, which was good for USD 27.68 billion. Revenue was up 18% last year to USD 45 billion, about seven times the size of the Las Vegas Strip.

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