Macau, the Asia’s Las Vegas, is experiencing casino revenue fall this year. Based from the information given by Macau Gaming Inspection and Coordination Bureau, the casino revenue dropped 12.2 percent on the second quarter of 2009 as compared from the same quarter last year. This is the first year that the largest gambling center in the world has a decline in revenue since its liberalization in the gaming industry last 2002.
The main factor seen by the operators and analysts on the Macau’s abrupt casino revenue fall is the decreased total number of visitors. Based on the Macau’s tourism office, there was a drop of 10.6 percent on the city-state’s number of visitors for the first five months this year. Tougher visa control by the Chinese government to its residents is impugned for the decreased number of visitors in Macau. The Chinese government limits the visit frequency of mainland passport holder to Macau in an attempt to put an end on gambling among its public servants and to stop money laundering. The frequency of a visit was limited to one time per 3 months and was implemented during the middle of the year 2008. Jackson Walker, an observer, said that the vast of the visitors in Macau is from the China mainland and the tightened visa restriction of the Chinese mainland had affected Macau’s casino revenue. The Macau market is still hoping that travel restrictions will be lifted soon.
Another factor seen on the Macau’s casino revenue fall is the global financial crisis. South China Morning Post reported that the crisis had a great impact on high rollers, which generates 70 percent of the city-state’s revenue. High rollers, who often play on credit, have delayed their repayments to junket agents who bankroll their gambling sessions. Because of this, junkets tightened their credit controls in fear of becoming bankrupt.
MGM Mirage, Las Vegas Sands and Wynn resorts, three of the biggest international casino operators had hoped that the Macau revenue will climb up soon. But based from the figures from the second quarter of this year, the Macau casino operators see that the revenue will continue to decline.
With the current situation, a lot of companies in Macau are interested in raising funds. A person knowledgeable of the current situation said that Las Vegas Sands Corp. plans to file an application with Hong Kong Stock Exchange to sell their shares to raise fund. Company executives that they will use the fund to resume construction of the building which was stopped last year as credit market froze. Wynn Resort Ltd. on the other hand has not yet decided when or if its Macau subsidiary will sell shares.
Macau is formerly a European colony and was handed over during the year of 1999 to China. Macau’s economy mainly relies on gambling revenues. The city-state’s opening for foreign competition attracted many of the biggest names in casino industry to invest causing Macau to have a quick rise to fame in casino gambling market. Macau is now the highest volume gambling market in the world as it surpassed Las Vegas’ casino revenues. Right now, 31 casinos are operating in Macau in which 19 are owned by magnate Stanley Ho.
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