Macau's casino revenue fell for the first time in five years last month as high-stake gamblers curbed spending in the world's largest gambling hub with the World Cup football tournament diverting some bettors.
Total gross gaming revenue dropped 3.7 per cent to 27 billion patacas ($3.4 billion) last month, the first decline since June 2009 when it fell 17 per cent, according to Macau’s Gaming Inspection and Coordination Bureau.
"Macau gaming stocks appear to have remained weak on concerns from the VIP slowdown and World Cup impact," Phoebe Tse, a Hong Kong-based analyst at Barclays Plc., wrote in a note published June 23rd. While weak casino revenue figures could continue to cause concerns, current valuations are "attractive" for longer-term investors, she added.
Casinos in Macau, the only place in China where they’re legal, rely on high rollers brought in by junket operators for more than 60 per cent of revenue. Growth in the VIP segment has slowed as gamblers cut spending amid a cooling economy and a nationwide crackdown on corruption in China.
High-rollers or VIPs, bettors who usually wager at least HK$5 million ($645,000) per trip, have been shying away from gambling in Macau.
“Everybody wants to lay low,” Edmund Lee, a partner at PricewaterhouseCoopers in Hong Kong who specialises in the gambling industry, said in an interview. Those high-stakes gamblers “don’t want to draw unnecessary attention amid China’s anti-corruption campaign,” he said.
China's President Xi Jinping has waged a campaign against corruption since taking over as Communist Party chief in 2012 and his clampdown on lavish spending have hurt luxury sales from Chow Tai Fook Jewellery Group Ltd. to Gucci bags. The country's economy expanded 7.4 per cent in the first three months of this year, the weakest pace since 2012.
Bloomberg
