Will Macau’s Casino Industry Make a Winning Comeback?
China has put a tight hold on Macau’s gambling scene. Will it make a gradual comeback soon?
Chinese visitors have started to flock Macau’s entertainment and gambling district again. It has seen a 7% increase last year as people have celebrated a weeklong holiday to celebrate China’s National Day. Its gross gambling revenue in early October has been 18% higher compared to last year.
Will This Signal the Return of Macau’s Glory Days?
The reason for the low base last year was due to the frequent typhoons. Industry pundits say that Macau will experience a 5% to 8% annual increase in its 3rd consecutive month of progress.
Plunging revenues have been experienced last year. The recent increase in revenues bids well for Macau. The big idea here is that while Macau’s gaming scene is growing again, it is now catering to a different set of target customers.
High rollers are now avoiding Macau after Chinese president Xi Jinpin has implemented rigid restrictions. Analysts believe that high-stakes gamblers have decided gamble in other countries instead. Morgan Stanley is anticipating that VIP revenue in the Philippines will grow up to almost 20% this year. Lower tax rates have enable casinos to operate outside of Macau.
Can Macau’s Famous Casinos Recover?
Macau’s popular casino and hotels have felt the repercussions of the evolving gambling landscape. Wynn Macau’s VIP revenues accounts for 60% of its casino revenues but is experiencing a gradual drop already. Its share price has plummeted to 68% in early Q1. Investors were optimistic that its new hotel and casino will attract high-end gamblers.
The Wynn Macau situation is a simple microcosm that reflects Macau’s gambling industry nowadays. As China continues to implement stricter and more conservative regulations, Macau’s once flamboyant and luxurious gaming industry has evolved into a simpler tourist-friendly landscape.
Will Macau regain its position in the upper echelon of the gambling world? Will it be overwhelmed by South Africa and Australia as gambling go-to destinations?