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Macau Casinos Record a Five-Year Low in Gross Gaming Revenue



  • September 2015 marks the 16th straight month of declining revenues in Macau.

  • Macau casinos record the lowest revenue in five years in September 2015.

Troubles continue to mount for casinos in Macau, as September's Gross Gaming Revenue (GGR) was the lowest recorded by the city's casinos in five years.

According to data published by Macau's Gaming Inspection and Coordination Bureau, casinos in the city recognized a combined GGR in September 2015 of MOP 176.02 billion ($22.05 billion), representing a 36.2-percent decline when compared to September 2014 and a 2.5-percent drop when compared to August 2015.

The gaming market also looks stark when looking at the third quarter of this year when compared to the same period last year, with revenues dropping by 34.4 percent.

Troubling, but not unexpected by many gaming analysts, this marks the 16th straight month of declining revenues when compared to the same period in the prior year. The steady declines are mainly attributed to less VIP gamblers visiting the casino from China, as casinos gradually move to a mass-market model, a crackdown on corruption by the Chinese government, and smoke-free initiatives.

September's decline can also be partially blamed on a huge theft of up to $258 million by employees of Dore Holdings, a junket working inside the Wynn Macau which acts as a middleman for high rollers.

According to GGR Asia, Deutsche Bank Securities Inc. analysts Carlo Santarelli and Danny Valoy stated in a note on Thursday that the declines were in line with expectations, explaining that, "[The] September results were broadly in line with expectations, as a better start to the month was quickly erased by the seasonal — and softer this year — pre-Golden Week malaise at month-end."

While a 36.2-percent decline is certainly a huge loss of business, most other months during the steady fall in visitors and revenue recorded sharper declines. In fact, this month's decline was the smallest since January 2015, when GGR fell by 17.4 percent.

This is hardly any consolation for casinos in Macau, who for the most part saw huge declines in their stock value in September. As reported on GGR Asia, Santarelli and Valoy also believe that the lower level of declines are still not encouraging for the market.

"While the September result is the smallest level of decline since January (Chinese New Year calendar shift), one would be hard pressed to call it encouraging, especially given the two-year stack accelerated to the downside relative to August (-44.7 percent in September versus -41.6 percent in August)," commented Santarelli and Valoy.

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