Wednesday, 5 November 2014

Macau's Loss, Vegas' Gain?

Gambling revenues in Macau continue to drop for the fifth consecutive month
Macau is suffering its fifth straight monthly decline , with last month's earnings plunging 23.2 percent year on year to 28.025 billion patacas.

The crackdown on corruption on the mainland is to blame, along with a ban on smoking indoors and now the Umbrella Movement which has entered its sixth week.

On Monday Macau's secretary for economy and finance, Francis Tam Pak-yuen, says the government still predicts revenue gaming growth to continue to slow down "for a period of time", but did not elaborate on what kind of time frame he was looking at.

That news led to gaming stocks dropping from a range of 0.6 percent for MGM China to 3.4 percent for both Wynn Macau and Melco Crown.

It seems the ban on smoking indoors that began on October 6 may have had a negative effect on Macau, though it's most probably the street protests that probably scared off mainland visitors from coming to both Hong Kong and China.

China Union Gaming released a report Monday that said: "... the creation of a new high-level office on anti-corruption indicates to us that the broader [anti-graft] drive is far from over and that the greater number of human resources allocated to this department indicates that the number of cases that are prosecuted could continue to grow".

The report noted the number of bribery cases that are being prosecuted rose by 31 percent year on year to 6,500 so far this year.

Also, Chinese gamblers may be traveling further, to places like Las Vegas to avoid scrutiny.

Wynn Resorts saw a rise of 9 percent rise in its Nevada properties, compared to the 5.6 percent drop in Wynn Macau.

Wonder if this signals the beginning of Las Vegas' gambling revival?

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