Economic Omelette
I
n June, for the first time in five years, Macau casinos suffered a gross revenue decrease (-3.7 percent) to reach 27.215 billion patacas. The slowdown continued and, in July, a further drop of
3.6 percent occurred, for a total of 28.415 billion patacas, when compared to the same period last year. August follow trend and registered another negative growth y-o-y. And analysts predict the same with September. Still, Macau is doing better overall than last year but growth is no longer a two digits. According to analysts, the 2014 World Cup seduced players from the tables and directed them towards online betting, while illegal UnionPay debit card transactions contributed to the overall casino revenue drop. Add to this the fact that China’s economy – Macau casinos’ most important source of revenue – is growing at a slower pace. Finally, the effects of China’s central government anti-corruption campaign are washing up in Macau as well. The June, July and August drops, however,
are not a source of concern for analyst Ricardo Siu from the Macau University Centre for Gaming Research. “Macau is a very particular market. The VIP market and the ‘junkets’ dictate the economic growth”,
20 OCTOBER 2014
he says, while anticipating that “the gaming industry will maintain a positive growth albeit with just a single digit”. Factors such as the greater transparency of junket operations, the casino smoking ban and greater scrutiny by Mainland China players will lead to a “healthy consolidation and adjustment” of the market. “Year on year growth has been impressive but it then needs to drop as part of the cycle. There’s a slowing down period, so that certain matters that rapid growth creates, such as the labour disputes, can be taken care of”, Siu posits. Joey Lao, president of the Macau
Association of Economic Sciences, is equally optimistic: “During this phase, Macau’s economy is still performing well and we have a great number of large infrastructure projects in the pipeline, so we can expect economic development for the coming two years”.
Economist and university professor José
Duarte agrees: “For the time being, the economy is contracting but we’re still well above the levels of five to ten years ago. We lived through those times, so we should worry but there is no reason for alarm”. In his opinion, “a contracting period, more or less sustained by the gaming revenues will
percent growth in gross gaming revenues posted during the first seven months of the year, June’s slowdown has
Despite the 10.2
left some apprehensive. In a territory that prides itself on having one of the world’s highest
economic diversification are a reality – is there reason for alarm?
revenues ‘per capita’ – but where high rents, manpower shortages and non-existent
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