Between them Macau’s casinos made more than US$40 billion in gross gaming revenue in 2014 – not bad given this was the first time in more than a decade that gaming revenue had gone backwards – but if ever there was a time for concern it is now.
Last week was Chinese New Year, unquestionably the busiest time each year in Macau, yet apart from a few of the most popular places we couldn’t help but notice how quiet it was around town. From what we saw, Chinese New Year activity was down as much as 50 percent in some places compared to this time last year with even our insufficient number of taxis spotted lining up with barely a customer in sight.
Which makes us wonder – if Macau isn’t busy during Chinese New Year, when will it be busy? Much of the talk in recent months has been about the decline in VIP visitors to Macau from Mainland China but when even mass gaming is quiet you know something is seriously wrong.
So what now? We applaud the central government’s anti-corruption crackdown which is a painful but necessary step in rehabilitating China’s sometimes soiled image as she continues her inexorable climb to the world’s major superpower. But there is no doubt people in Macau are starting to get restless. Share prices have tumbled, demand is way down and an enormous amount of new supply (planned when Macau was booming) is about to hit the market.
One of the big questions on everyone’s lips is how many gaming tables will the new casinos get? In the current climate, an argument for a small number of tables for each new property is likely to be very persuasive – yet more bad news for the industry.
When, and how, will it end? If anyone claims to know, don’t believe them. No-one knows, not even the central or Macau governments. It is very much a case of “watch this space”.
