There are no smiles for investors in Macau casinos as September revenues underline the trend of declining revenues in the last five years. The peninsula’s casino revenues for the month just passed have been the lowest in the last five years. This disappointing level of Gross Gaming Revenue (GGR) may have investors in the arena of poker and other betting games re-evaluating their future in the business.
Of course, there is no sign that poker and related games are about to stop in Macau any time soon, but investors cannot afford to sit on their laurels. There is, however, no panic as the gaming culture is well entrenched in Macau. The place has for many years been referred to as the Las Vegas of Asia. Playing poker and other betting games in this city is the order of the day.
How steep is the decline in Macau casino revenues?
Evidently, Macau’s gaming business has been experiencing tough times. According to Macau’s Gaming Inspection and Coordination Bureau, the comprehensive GGR for September this year has fallen by 36.2% compared to the same month last year. In absolute figures, the revenues for September 2015, whether from poker or any other betting games in the city’s casinos, totalled $22.05 billion. That translates to MOP$176.02 billion as the Macau currency, Macanese pataca, is much weaker compared to the US dollar. In fact, the local currency is also slightly weaker than the Hong Kong dollar (HKD).
The immediate revenue decline has been calculated to be 2.5%; that is the drop from the figure of August 2015 revenues. Whether something will trigger increased poker activity in coming months, or whether poker players and other betting enthusiasts will up their stakes resulting in increased revenues is something to wait and see.
There is, however, not much optimism for the 3rd quarter of this year as far as gross revenues from poker and related casino games are concerned. It is predicted that this year’s third quarter may see a drop in revenues of around 34.4% in comparison to last year’s 3rd quarter. A good number of gaming analysts are, incidentally, not surprised. According to them, September’s revenue decline in gross casino revenues has just been a culmination of 16 continuous months of falling revenues.
Why the fall in casino revenues?
Whereas none of the analysts has pointed fingers on poker or any other betting game in particular for the casinos’ financial woes, it has not escaped their notice that the number of Chinese VIP gamblers has significantly fallen. The rich in China do not just engage in online poker but also frequent established casinos where they are known for playing high stakes. This was the case in past years, where rich Chinese gamblers visited Macau, played poker and other betting games, and generally made the gaming scene very vibrant.
That scenario is apparently no longer sustainable as the Chinese government continues to weigh down on corrupt citizens. At the same time, casinos are now generally leaning more towards a mass market rather than relying on a few VIPs to keep them afloat. It is also not easy to underrate the impact of the initiatives on restricting smoking in poker playing areas and other public arenas in general. Gamblers are one lot that does not do well with strict rules, and as such, stringent social rules may keep some of them away from casinos and other public betting arenas.
Significantly too, in regards to the September revenue decline is a massive theft that took place in Wynn Macau casino, totalling a whopping $258 million. That theft was linked to Dore Holdings’ employees who act for high rollers as middlemen.