Macau, the world’s biggest gambling hub, has reported a remarkable revenue jump for November month. Casinos in the Macau have collected 22.6 percent more than what they did last year. It also marked the sixteenth consecutive month of growth for the industry in Macau.
The data from Macau’s Gaming Inspection and Coordination Bureau reveals that revenue reached 23 billion patacas (£2.12 billion), which is second highest for a month’s revenue. The lucrative but highly volatile, big-spending VIP segment is expected to fuel the full-year revenue growth by 18 to 20 percent for 2017, totalling at $33 billion to $34 billion. If it happens, it would be the first annual growth in three years.
Revenue growth has been strong particularly for Macau’s Cotai Strip operators, including Sands China Ltd., Wynn Macau Ltd., Galaxy Entertainment Group Ltd and Melco Resorts & Entertainment Ltd. SJM Holdings Ltd. and MGM China Holdings Ltd. have registered losses while their Cotai Strip resorts are under development.
Analysts cite that sustainability of the big-spending VIP segment, so-called whales who wager around 1 million yuan ($151,308) per bet, is doubtful. The experts also mention macroeconomic factors such as a slowdown in money supply growth and real estate pricing among the reasons behind the slow business.
Meanwhile, the pressure on casino operators to develop non-gaming attractions has been mounting as the government plans to diversify Macau’s economy.
The six currently operating casino licenses will expire in 2020. The government has not made any announcements so far to disclose the nature or timing of any bidding process. On the subject, Macau’s Chief Executive Fernando Chui has said that more details regarding the new licensing can be expected by mid-2018.
As the government mulls over streamlining and strengthening the gaming industry, tighter regulations are likely to create uncertainty for casino operators.