Gaming Revenue in Macau Drops 3.2% as Number of Visits Declines

The data provided by Macau’s Gaming Inspection and Coordination Bureau reveals that during the month of October, this Asian hub’s gaming revenue fell 3.2%. This is in spite of Golden Week holiday festivities which traditionally bring higher income to this city.

Looking at the figures on a monthly level, visitors influx rose 11% from September, but this is well below the 19% rise in number of visitors in the same period last year.

Not Unexpected

Analysts have expected a decline in gaming revenue…

…in fact, this drop of $3.3 billion (P26.4bn) follows the P22.1bn drop from September which was the lowest figure from September 2018. Macau’s gross gaming revenue was in decline during 6 of the first 10 months of this year.

In April and August, the gross gaming revenue dropped more than 8%.

Cumulative gross gaming revenue in Macau for 2019 was P246.7 billion at the end of October which is 1.8% less compared to the corresponding period last year and its P251.4 billion.

It’s Not Only About Low Visits

University of Macau conducted a study that showed that the amount of people gambling in Macau is also in decline. In 2016, this percentage was 51.5%, while in 2019 this amount fell to 40.9%.

Gaming services exports fell 0.8% in August which was the key factor contributing to the technical recession that happened in Macau in the second quarter of the business year.

Nearby Jurisdictions Posing a Threat

Revenue made from VIP players is on the drastic rise, compared to other jurisdictions, though. More and more state-of-the-art casinos were built in this city in the recent years, as options became more numerous for punters – paving the way for Macau becoming the default destination of choice for players in the region.

However, other countries nearby have done the same and followed suit, presenting new options to players and so Macau lost $1.4 billion of VIP GGR to Cambodia, Philippines, Vietnam and South Korea. The total VIP revenue is expected to rise this year again, to $2.6 billion – this is according to forecasts made by Union Gaming.

Macau has lost high-rolling punters to markets that offer better returns – South Korea’s law dictates a 20% tax on VIP GGR, the Philippines 15% and Vietnam 14%. Macau has an effective tax rate of 39% on VIP GGR.

Source:

“Macau gaming sector hurt by drop in visitor numbers”, igamingbusiness.com, November 1, 2019.