Slow economic growth, weaker Yuan, and trade tensions with the US seem to have hit the city’s casino market.
Hong Kong –Macau’s casino industry fared quite poorly in April in terms of gross revenue, with earnings dropping to as low as 8.3 percent. Considered to be the worst ever revenue drop since June 2016, it is primarily being attributed to lesser traffic to Macau’s casinos in the light of a weakening economy.
According to the statistics presented by Macau’s casino regulatory body, Gaming Inspection and Coordination Bureau, on Wednesday, the total gambling revenue reported in the month of April has been the weakest so far, falling down to 23.6 billion patacas ($2.92 billion) from 25.8 billion patacas last month.
April’s revenue figures are actually in accordance with the market analyst estimates of a 3-12 percent revenue drop year on year. However, the earnings this time have hit the lowest in three years and the possible reason for this may be an overall slowdown in the economic growth of China, which is the world’s second-largest economy today.
Yuan’s exchange rate is currently weak in the market, as compared to that of other currencies, and to add to this, the existing trade tensions between Washington and Beijing are likely to further reduce the city’s economic growth.
All of these reasons put together have been enough to keep the high rollers in Macau away from its casinos for a while, which explains the dip in gambling revenues. Even so, market experts are still hopeful of the casino industry picking up and its revenue taking a rebound sometime by the end of 2019, once this “temporary” phase fades away. “China’s economy is still uncertain, so the rich Chinese and the VIPs will stay relatively conservative,” said Kevin Leung, Executive Director, Investment Strategy, Haitong International Securities.