Revenues plunge further

Casino takings have shrunk for the tenth consecutive month although analysts sense the market stabilising Gaming revenue dropped 39.4 per cent year-on-year in March from MOP35.5 billion to MOP21.5 billion (US$2.7 billion) putting the industry through its worst quarter since January-March 2011, the Gaming Inspection and Coordination Bureau says. During the first three months of 2015, gaming revenues accounted for MOP64.8 billion, which represents a decrease of 36.6 per cent year-on-year from MOP102.2 billion. The worst record since January-March 2011, gaming revenues in that period amounted to MOP58.8 billion. The drop in gaming revenues in March was still the second worst to date, after revenues were cut 48.6 per cent year-on-year in February 2015 to MOP19.5 billion from MOP38 billion. The fact revenues have been declining for another month adds to the agony of Macau’s industry that has seen revenues plummet since June. In the sector and among analysts, the central government’s crackdown on corruption, the slowdown of Mainland China’s economy, the smoking ban and stricter visa rules for ainlanders visiting the Special Administrative Region have been blamed for the declining revenues. However, the Hong Kong-based gaming analyst at BNP Paribas, Shengyong Goh, told Bloomberg that the bright side of the numbers revealed by the gaming department is that the market is stabilising. “The in-line result is just showing that the market is stable. I would think that the worst dip is over,” Shengyong Goh told the news agency. “It’s going to be a long time before any upside catalyst”. In the meantime, secretary for Economy and Finance Lionel Leong Vai Tac said that the government now forecasts that the income derived from the special gaming tax at MOP84 billion is down 27.3 per cent from the initially estimated MOP115.5 billion. The adjusted estimation for the gaming tax revenue follows a bleaker outlook that the Macau government has on the city’s average gross monthly gaming revenue this year, which is MOP20 billion versus the earlier estimate of MOP27.5 billion, Chief Executive Fernando Chui Sai On said when delivering the 2015 Policy Address on March 23. Following the adjustment in estimated income from gaming tax, the Secretary announced that the government’s estimated total revenue for this year is in the region of MOP119.9 billion, down 22.4 percent from the initially estimated MOP154.6 billion. The city’s two major public funds that are largely supported by gaming revenue – the Social Security Fund and the Macau Foundation – will see nearly MOP1.68 billion less in estimated income, Mr. Leong said.