Macau’s casino industry went through its biggest slump after Chinese President Xi Jinping launched an anti-corruption crackdown in early 2014 which brought about the collapse of Macau’s VIP gaming market and resulted in 26 months of consecutive gross gaming revenue (GGR) decline. Macau’s government instructed all casino operators to stop banking on gambling revenue alone and start expanding their non-gaming offerings.

Casino operators have followed those instructions and it appears to be finally paying off as Macau’s Gaming Inspection and Coordination Bureau confirmed that August 2016 was the first month to break the GGR decline after a 1.1 percent growth rate was reported. The Bureau also revealed that the overall GGR in September stood at $2.3 billion which was a 7.4 percent growth. The opening of the Wynn Palace casino in August and the Sands Parisian Macao casino in September have helped with the turnaround as both these billion dollar facilities have invested heavily into non-gaming entertainment facilities.

Gaming analysts believe that October could also be a good month for Macau’s casinos as the recently concluded Golden Week brought in a significant number of visitors to Macau. Analysts report an 8 percent growth rate in the number of visitors when compared to the Golden Week in 2015 and Macau’s casinos reported MOP 9.8 billion during the first 10 days in October. Premier Li Keqiang visited Macau on October 10 to discuss a number of topics including the future of the casino industry which gaming analysts believe will continue to boost Macau’s turnaround.

In a note reported on Asia Gaming Brief, Bernstein analysts said “While there have been media reports about China providing a positive policy boost to Macau during the visit by Li Keqiang, with respect to gaming directly we do not see any such direct policy initiatives.  There have been broader comments made about supporting tourism and MICE business in Macau, which may be +ve in the longer run.”

Gaming analysts believe that the Macau casino industry slump is finally over but have cautioned against being over-optimistic and expecting to see a strong growth in GGR every month. Surprisingly one of the reasons for the turnaround is due to the performance of the VIP market segment. Sanford C Bernstein Limited analysts have confirmed that GGR in September for the VIP market segment in Macau turned out to be higher than expected due to strong VIP volumes and VIP hold rates.

The Gaming Inspection and Coordination Bureau will release another report during the middle of this month which will give analysts a better idea of the split between mass market and VIP GGR. Deutsche Bank Securities Incorporated analysts Danny Valoy and Carlo Santarelli estimate GGR in October will increase by as much as 8.5 percent. The Macau casino market turnaround has boosted the share prices of a number of major casino operators including Wynn Resorts, Las Vegas Sands and MGM Resorts.