A 9.3% rise in Macau casino revenue last month has disappointed investors despite the world's most lucrative gaming destination collecting $4.1bn in May- the region's fifth highest monthly gaming revenue ever.
The figures, which were published on the city's Gaming Inspection and Coordination Bureau website, have fallen short of expectations of between 13% and 15% growth. This was also the smallest increase in gross gaming revenue for the region since February, with April seeing a 10.6% rise.
The announcement rocked the stock exchange as growth slows after a decade-long boom, with nervous investors punishing Macau shares traded in Hong Kong and the US.
Galaxy Entertainment Group lead the decline, falling 3.1%- the firm's biggest drop since the beginning of May. SJM Holdings began its downturn in the morning trading session, later falling by a total of 3.2%. Sands China fell 1.4% and Wynn Macau 1.2%.
Aaron Fischer, head of consumer research at CLSA, told Bloomberg the results were "a little disappointing" and that there was a "sharp drop at the end of the month".
One explanation for the slump is the Chinese authority's crackdown on illicit transactions that funnelled money into Macau and away from the mainland at the beginning of the month.
UnionPay cards, which were being used in the transfers, were seized and regulations tightened. VIP gamblers - who generate around two-thirds of Macau revenue - bore the brunt of the effects of the initiative.
VIP gamblers are usually defined as customers who wager at least $645,000 per trip. The region largely relies on these high-rollers, although firms have attempted to decrease that dependence by extending the number of hotel rooms available and adding entertainment venues to attract middle-class gamblers.
Analysts have cited stagnant VIP revenue as the most likely culprit. Other reasons for the sluggish growth could be government limits on gambling tables. In 2010 authorities said they wouldn’t approve new casino projects and would only allow 500 additional gambling tables in the following three years, restricting any plans for major expansion.
But while the mediocre growth might be a cause for concern for investors, many are confident Macau's medium to long-term growth is not in trouble.
Unlike Macau's slow VIP growth, the region's profitable mass-market continued to grow at 30% and remains strong.
Matthew Ossolinski, chairman of Ossolinksi Holdings, told Forbes: "While month-to-month it is difficult to predict specific outcomes, Macau's continued, long-term growth is well intact, underpinned by a perfect storm of strong economic fundamentals, strong political support, strong egos and a culture disposed to gaming. The market remains vastly underpenetrated."
Also speaking to Forbes, another unnamed analyst agreed that what has been the "fastest growing economy in the world over the past decade" will be the same again "over the next decade".