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Macau casino revenue shrinks 14pcby Stella Zhai
Macau's gaming revenue slipped for the third straight month to 22.84 billion patacas (HK$22.17 billion) in December, marking the worst annual decline since 2015 as the world's largest gambling hub struggled to lure high rollers amid geopolitical tensions and an economic slowdown.
Gross gaming revenue shrank 13.7 percent from a year earlier, according to data from the Gaming Inspection and Coordination Bureau.
That was lower than the median analyst estimate of a 15 percent fall. Full-year revenue also slid 3.4 percent from 2018 to 292.5 billion patacas.
The year's revenue decline follows two years of gains in Macau and comes as a closely watched transition of a new government administration is under way.
Arrivals in December were further crimped by President Xi Jinping's visit to the city to celebrate the 20th anniversary of Macau's handover.
This meant tighter visa policies, travel restrictions and enhanced border security.
The year was particularly challenging for the industry as it faced trade war uncertainty, a slowing Chinese economy and a crackdown on cross-border gaming that squeezed junkets and the VIP sector.
Meanwhile, rival gaming hubs such as Vietnam are threatening to chip away at Macau's dominance.
The escalating protests in Hong Kong have deterred travelers from visiting the gaming hub, as they usually visit Hong Kong and Macau on the same trip.
The enclave relied on by operators, including Sands China (1928), MGM China (2285) and Wynn Macau (1128) for the bulk of their revenue, will find it difficult to return to the double-digit growth of the past, analysts from Bloomberg Intelligence said previously.
Casinos are racing to build bigger and flashier resorts to offer more entertainment options to help replace weaker VIP revenue and keep the casinos aligned with Macau's guidelines for providing more family-friendly attractions.
But this year may be better for casino operators as new hotel supply and infrastructure improvements kick in.
Xi, during his recent visit, urged Macau to diversify its economy and carve out a wider role in the Greater Bay Area and his signature "One Belt, One Road" initiative.
The Bloomberg Intelligence index of Macau operators rose 12 percent in December as investor sentiment improved over signs of a trade war truce and Beijing's supportive stance toward the enclave. That compared to a 7 percent gain in the benchmark Hang Seng Index.
Macau has become the world's largest gambling hub over the past few decades and much of its stability can be traced to its monopoly over casino gambling in China. The industry accounts for 80 percent of the government's total revenue and supports about US$1,000 (HK$7,800) in annual handouts per resident.
Source: The Standard
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