Although gross gaming revenue in Macau saw a year on year drop in the first half of 2016 to MOP107.79 billion, a decline of 11.4 percent from the corresponding period in 2015, the latest report by the government says that those numbers were within expectations for 2016. The government’s overall prediction for 2016 is that GGR will be around MOP200 billion (about US$25b) with monthly averages of around MOP16.6 billion. June numbers were at MOP15.88 billion or 8.5 percent lower than June 2015 numbers.
The government report illustrated that the first quarter of 2016 GGR represents 53.9 percent of what they had forecast for the entire year. Although their prediction is for a narrowing decline, they do not expect revenue growth in the second quarter to enter positive territory.
Mass market gaming made improvements in the first half of 2016 compared to the same period a year ago, with a 10 percent jump to 53.1 percent of the overall market, while still showing a 3.6 percent decline y-o-y. VIP revenue continued to fall in the first half by 17.3 percent. The government pointed to the numbers as proof that their efforts to steer diversification in the gambling industry have been so-far successful.
The government’s “adjustment” of Macau’s gaming industry toward a more tourism and cultural focus, and away from a specifically VIP gambling focus, which adjustment also coincides with a crackdown coming out of Beijing on corruption and graft, has precipitated a 25 month decline in gaming revenues from a peak of US$45.27 billion in 2013 to an expected US$25 billion for 2016.
All six of the current casino concessions in Macau are are set to expire in 2020 and 2022, depending on the contracts, and the government has yet to indicate how they intend to proceed from there. Most analysts are predicting that the city’s gambling revenues will again be in a state of growth by that time, but nobody knows for sure whether current license holders will be allowed to simply renew, or if a new competitive bidding process will open up. However, current law (Law No. 16/2001) states that the period of a concession shall not exceed 20 years but can be extended one or two times, “not exceeding in the aggregate five years” (Article 13).
Yesterday’s government report indicated that more in-job training will be offered to local employees to assist in upward mobility as well as horizontal mobility within their chosen careers.
The government also noted its intentions to stimulate non-gaming development in the tourist sector. This, as “part of the effort to coordinate the transformation of Macao as a world center of tourism and leisure; and to propel a sustainable and healthy development of the city’s gaming industry,” the report said.