According to a report from the Bloomberg news service, Fernando Chui, Chief Executive for the former Portuguese enclave, used Wednesday’s televised meeting of the city’s legislature to highlight the positive effects of operators trying to attract more tourists and recreational gamblers over their more customary VIP clientele.
“Macau’s gaming industry and the whole economy will continue to adjust but the decline may shrink to 7.2% this year and even resume growth in 2017,” said Chui. “It’s a good time for Macau to re-position after a 25-month gaming revenue drop.”
Bloomberg reported that Macau’s gross domestic product dropped by 20.3% in 2015, which was even worse than the previous year’s 0.9% fall, as high-rollers were increasingly scared off due to the ongoing anti-corruption crackdown in China. As the casino industry accounts for half of the city’s gross domestic product, Chui explained that local officials were working with its six casino operators in order to “improve synergies” between gaming and non-gaming pursuits and he hopes to raise the proportion of casinos’ non-gaming revenues to 9% by 2020 whereas it stood at 6.6% in 2014.
Macau’s casino receipts for June fell to their lowest levels since September of 2010, which marked 25 consecutive months of decline, although the International Monetary Fund forecast in April that the contraction in the city’s economy is expected to narrow this year before growing by 0.7% in 2017.
Despite the downturn, Sands China Limited, which is a subsidiary of Las Vegas Sands Corporation and operates The Venetian Macao, Sands Macao, The Plaza Macao and Sands Cotai Central, reported a rise in mass-market gaming revenues for June. This is the first such increase in two years with Chairman Sheldon Adelson declaring that he is optimistic recreational gamblers and tourists are helping to spur a recovery in Macau’s gaming industry.
Similarly positive, real estate fund manager Sniper Capital Limited recently stated that property sales transactions in the city reached 2,123 for April and May, which marks the highest two-month period since 2013. The figure also exceeded the 1,739 units sold in the same period in 2014 when prices hit their peak.
A report from Grant Govertsen, an analyst for boutique investment bank Union Gaming Group, maintains that the forthcoming openings of the $4.2 billion Wynn Palace from Wynn Resorts and Las Vegas Sands Corporation’s $2.7 billion Parisian development will provide opportunities for Macau’s gaming market to expand. He predicted that recreational gambling would grow in the low double-digits while gains in revenues from VIP gambling remain modest before gross gaming revenues “finally turn positive by September”.