Gambling venues are opening across the region to lure Chinese bettors from Macau—home to Las Vegas brands Wynn, Sands
BE2C2 Report – American gambling companies that have won big in Macau in recent years are facing increased competition from casinos popping up across Asia to lure away Chinese high rollers and tourists.
Macau’s gambling revenue was $37 billion in 2018, six times that of the Las Vegas Strip and more than double that of the rest of Asia combined, based on Fitch Ratings estimates. But Macau’s gambling revenue growth fell to its lowest level in three years last month, led by a continued decline in big-spending gamblers.
April win plummeted 8.3 percent, the biggest percentage drop since June 2016.
China’s slowing economy is the culprit for the enclave’s gaming revenue slowdown, says casino.org. The mainland government has additionally advised Macau to reduce its dependency on gaming, and part of that will be accomplished by allowing casino operators to develop non-gaming entertainment attractions and convention spaces on the neighboring Hengqin Island.
The anti-money laundering protections could be spurring illegal (undocumented albeit underground betting) activities, adds casino.org. Earlier this year, Macau police infiltrated a so-called “underground bank” that reportedly processed more than $4.4 billion in transactions. The network catered to high rollers wanting to withdraw large sums of money without leaving a paper trail.
Macau has implemented various technologies and protections to curb money laundering. ATM machines are now equipped with facial recognition, and daily cap limits regulate how much a patron can withdraw.
A weakening yuan, and ongoing trade talks between China and the US continue to cast uncertainty across Macau, adds casino.org.
Economic observers have said in recent months that the trade tensions could prevent casino operators from making further investments in their properties.
Macau has taken also steps to reduce its reliance on VIP high rollers. More attention has been given to the mass market by way of non-gaming attractions and amenities, which comes as a result of China President Xi Jinping suppressing junket groups that cater to the mainland’s elite.
Meanwhile, Macau police allege a Chinese man found dead inside a guesthouse on the enclave’s main peninsula was the victim of a brutal beating at the hands of three loan sharks.
Police believe the Chinese who held $6,373 gambling debt was attacked over his outstanding liability.
However, many analysts – and casino executives – believe the worst is over.
Macau is the number one gaming market in the world, but we all know it can be volatile,” MGM Resorts CEO Jim Murren said.