As we pull to close down the curtains on the year 2019, most of us hope that at least this last month will bring with a silver lining. But this is not the case for casinos in Macau. News reaching casino.org is that the gross gaming revenue in Macau is already ragging behind its set targets.
A report by JP Morgan, has shown that the total earnings of the first 15 days of December are at an estimated $1.35 billion, which equates to $90 million per day. This is a 16 percent decline from the same period last year and an estimated 10 percent year-on-year loss.
Financial analysts expect the total earnings from December alone to drop 14 percent to 16 percent from last year and in fact the figures could be worse off. This will make December the weakest month of 2019. This comes in spite of the increased number of visitors in Macau over the month.
2019 is set to mark the end of the two year rebound for casinos in Macau. In 2016, the gaming earnings fell to $27.9 billion from $45 billion in 2013. This was attributed to the interference by the government of the travel arrangements of wealthy persons from mainland.
Consequently, casinos had to adjust their games to attract the general public. This saw the earnings increase to $33.2 billion in 2017 and $37.8 billion in 2018.
There were high hopes coming into the new-year, and some experts went ahead to publically announce possible changes. Unfortunately, the hopes have since been stalled by the tough economic year 2019 has been. From the slow economic growth in China to the ongoing dispute between China and the US (which obviously may not end soon), it has truly been a tough year. Let’s not forget the ongoing protests in Honk Kong.
Even with the ongoing celebrations to mark 20 years since Macau was returned to China from the Portuguese, there is not much hope for the gaming industry. Political executives as well as citizens are expected to fill up the casinos hotel rooms, but not expected to gamble at the same rate as their usual customers. But it seems all hope is not lost.
Last week, China and United States agreed to implement phase one of their trade deal. This could be light at the end of the tunnel as already analysts predict that this could have a positive impact on the gaming industry.
A Deutsche Bank analyst predicts that the total gaming revenue will grow by 3.6 percent next year. Another Morgan Stanley predicts a 2 percent increment in the gaming revenue. Signing of the deal has also brought about criticism.
Fitch Ratings say that they simply cannot see potential for growth of the gaming industry in that region. However, it changed its forecast on Macau gaming industry from negative to stable. It also added that the tension between both countries could further affect the outcome.