till, Macau’s 35 casinos collected US$ 3 billion in January, the Macau Gaming Inspection and Coordination Bureau said Monday. As a comparison, the figure that is almost half of the US$ 6.37 billion the Strip collected from gamblers in all of 2014.
January’s decline was the eighth straight monthly drop. In December, gaming revenue fell 30.4 percent to US$ 2.9 billion, Macau’s largest-ever single month decline. The last four months of 2014 saw double-digit decreases, including a 23.2 percent dip in October.
“This was inline with our expectations of an essentially flat month on a sequential basis,” said Union Gaming Group analyst Grant Govertsen told investors. “Most importantly, and supporting our recent upgrade thesis that we’ve reached a much-needed point of stabilization in the market.”
Analysts are already predicting February will mark the ninth straight monthly decline, despite having the lucrative Chinese New Year holiday. “As always, Chinese New Year should be a significant catalyst, and our checks suggest bookings are lower than prior years,” said Wells Fargo Securities gaming analyst Cameron McKnight.
In 2014, Macau collected US$ 44.1 billion from gamblers, a decline of 2.6 percent over 2013’s record US$ 45.2 billion. The year marked the first time revenue fell on a year-over-year basis since American companies began operating in the Chinese Special Administrative Region in 2003.
Macau still took in more than seven times the Strip’s annual gaming revenue and far outranks both Nevada and Singapore as the would’s largest gaming revenue-producing market.
Macau’s casino industry has suffered since June. A crackdown on corruption by the Chinese government has focused on junket operators who bring high-end baccarat gamblers to the casino’s ultra-exclusive private gambling rooms. Several operators have been linked to Chinese organized crime triads.
MGM Resorts International, Las Vegas Sands and Wynn Resorts all operate casinos in Macau and are expanding their holdings.
Las Vegas Sands and Wynn Resorts rely on Macau for the vast majority of their quarterly earnings. Both companies, as well as MGM Resorts, spun off their Macau holdings into separate publicly traded companies on the Hong Kong Stock Exchange.
The three Nevada gaming companies are moving forward with new developments on Macau’s Cotai Strip region: Las Vegas Sands’ US$ 2.7 billion Parisian, Wynn’s US$ 4 billion Wynn Palace and the US$ 2.9 billion MGM Cotai. Other Macau casino operators have Cotai projects under development, including Hong Kong-based Galaxy Entertainment’s expansion of the Galaxy resort and Melco’s Studio City complex.
Most observers predict the current Macau downturn will reverse itself sometime this year.
The Beijing government wants Macau to diversify its economy beyond gambling. New casinos are required to increase their non-gaming amenities, such as retail, dining and entertainment.