Bets are off in Macau as graft crackdown hits

 
Joseph Millis
The Chinese New Year has failed to lift Macau’s gaming revenues
A CRACKDOWN  on corruption in China kept high-stakes gamblers away from Macau during the peak Lunar New Year holiday period, causing gaming revenue to almost halve.

Gross gaming revenue in the world’s biggest gambling hub fell 49 per cent to 19.5bn patacas (£1.6bn) last month, Macau’s Gaming Inspection and Co-ordination Bureau said.

Macau last year posted its first annual decline in gaming revenue, as gamblers avoided the city amid China President Xi Jinping’s anti-graft campaign, and as the country’s economy slowed.

The industry might face another eight per cent drop this year, a Bloomberg survey showed, after last year’s 2.6 per cent fall.

“The biggest culprit for the weak month was the al­ready-troubled VIP segment,” Grant Govertsen, an analyst at Union Gaming Group, wrote in a note. “While we believe there was a pickup in VIP headcount, gaming volumes just weren’t there.”

VIP customers may have made a conscious decision to stay away from Macau given the potential for increased scrutiny by Chinese authorities during the holiday period, according to Govertsen. Revenue will recover in the second half, he wrote.

Sands China rose 1.7 per cent to HK$35.90 at the close in Hong Kong trading, while Wynn Macau gained 2.4 per cent and MGM China Holdings climbed 3.2 per cent. Galaxy Entertainment Group added two per cent, the second-best performer on the city’s Hang Seng Index, which slid 0.7 per cent.

The February figures were better than estimated as gambling revenue strengthened in the last few days of the month, Phoebe Tse, an analyst at Barclays based in Hong Kong, wrote in a note. Analysts had expected declines of 50 per cent to 56.3 per cent.

Macau’s casinos raked in an all-time record of 38bn patacas in February 2014, a year-on-year jump of 40 per cent at the time.

However, last month’s decline brings monthly casino revenue back to levels last seen in early 2011.

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