Casino Revenues in Macau Keep Falling

Macau Casino revenue experienced fall of 36.2% to 17.4b patacas ($2.2b) in June according to the report which was released by Macau’s Gaming Inspection and Coordination Bureau. Results were slightly better than analysts expected as they predicted 38.3% drop in casino revenue.

The results are still a cause for concern as Macau’s casino revenue fell to the lowest point in last four years. Lionel Leong Vai Tac, Secretary for Economy and Finance, said two weeks ago that gaming revenue in Macau could possibly drop to 16b patacas in June.

The analysts consider travel restrictions one of many reasons that Macau’s revenue experienced a significant drop in June. However, gambling operators don't need to panic just yet in lieu of Macau’s government announcement that from July 1st Chinese passport holders can stay in Macau longer. They will be allowed to stay in Macau for seven days and gain second entry within 30 days, as authorities have reversed the tightened transit visa rule which was created a year ago.

Analysts Chris Kwai and Haofei Chen are expecting that government will come up with more supportive policies in the future but contrary to their expectation it seems more government restrictions are on the way. It is believed that government’s casino smoking ban will have negative impact on casino revenues as Macau’s revenue depends mostly on players from China - the world’s largest nation of tobacco consumers and producers.

It has been estimated that in 2012 China had about 281 million smokers which, at that moment, was the highest number of smokers in the world in a single country. The partial ban that was put in place in 2013 in Macau had no huge impact on the casino operators because they moved the most productive tables into the smoking areas.

Some analysts believe that Chinese players will not stop visiting the world’s biggest gambling hub just because they can’t smoke at tables. However, gambling operators are afraid that they will lose many customers due to the government’s full smoking ban.

The gaming sector explained how smoking ban will have negative impact on casino business but the government was committed to its plan, refusing to sacrifice health of visitors, residents and casino workers.

Secretary for Social Affairs and Culture Alexis Tam Chon Weng said that smoking of electronic cigarettes is also prohibited in order to have a clear air in all properties of Macau.

Revenues in the world’s biggest gambling hub have been falling for 13 months now and many are afraid that it will get worse. Numerous things can be blamed for the Macau’s latest unfavorable situation but Xi Jinping’s anti-corruption crackdown is one of the main reasons for revenue drop.