What the trends in the Macau casino market are pointing to

By David Cook
The decline in gross revenue for Macau casinos is now getting close to two years, in terms of monthly year-on-year falls, but the signs are that the market could be close to flat-lining.

March’s result of 17.98bn patacas (£1.57bn) generated is down 16% year-on-year and is down from February’s 19.52bn patacas.

The last year-on-year monthly increase to have been reported was May 2014’s 9% rise to 32.35bn patacas, and 22 consecutive drops have been recorded since.

Increased regulation against corruption, restrictions on the number of days Chinese tourists could stay in the city and problems with Macau’s economy have all been listed as potential reasons for the slump.

That February result may have given off the idea that the downturn was set to come to an end, as the outcome was down just 0.1% and was the third straight month-on-month upturn.

However, March was always likely to be slightly more difficult to beat, as March 2015’s total of 21.49bn patacas was the second highest of last year.

For next month, April’s target to top is 19.17bn patacas, which is closer to being in line with the monthly sums that have been reported this year.

No more freefall?

What does seem to be clear from the first three months of this year is that the months of excessive decline are at an end.

With regards to the size of the decreases in gross revenue this year, the average year-on-year monthly fall has been 2.86bn patacas, while the average year-on-year monthly slide last year was 10.06bn patacas, with the only clear exceptions to that pattern being January’s decline of 4.99bn patacas and December’s drop of 4.95bn patacas.

The 12 months of 2015 were up against 10 scores of over 25bn patacas in 2014, while the remaining nine months of 2016 are playing off against just two scores over 20bn patacas (May and October).

Nine of the monthly year-on-year descending figures last year were down over 30% and that has not been the case with the three months of this year so far, with the highest fall, in terms of percentages, being January’s 21% decline to 18.67bn patacas.

Bottom line

The trends show that minor increases or decreases could be expected for the time being and that the market seems to be over the worst, but it could still be some time before it is back near its 2013 annual peak of 360.75bn patacas as the market stabilises.
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