3 Alarming Trends in Macau презентация

Gaming Revenue Is Falling Off a Cliff Gaming revenue has dropped to levels not seen since 2011. February gaming revenue dropped 48.6% to $2.4 billion.

Why Gaming Is Down in Macau China’s government has been cracking down on corruption and money laundering. Junkets that once fed Macau’s VIP market have come under pressure, and some have closed their businesses. Business owners who once gambled millions in Macau have hunkered down and delayed or eliminated once-regular trips to Macau.

A Building Boom Is Coming While business is struggling, casino companies are building new supply. All six concessionaires plan to open new resorts in the next three years. Las Vegas Sands, Wynn Resorts, and Melco Crown are building new hotels (seen on the right) that could cannibalize their existing businesses.

No One Saw This Coming Macau’s gaming market seemed constrained by supply, not demand, until summer 2014, when revenue began to decline. By the time the decline began shovels were in the ground on a massive expansion on Cotai. If the decline in revenue continues, we could see major declines in profits out of gaming companies, no matter what market they serve.

It’s Not Just a VIP Problem VIP gaming revenue fell throughout 2014, but until Q3, mass market play remained flat. In Q4, revenue dropped 20% Q/Q, showing that mass market may be a problem in 2015 as well.

Macau Faces Challenges It Has Never Seen Gaming revenue is plunging, and it’s uncertain if or when players will return. The Chinese economy, which supplies most of Macau’s gamblers, is starting to sputter. A crackdown on corruption and money laundering has already hit Macau’s revenue, a trend that will continue this year. Increasing supply from new resorts will mean a greater fight for revenue in the near future.