Macau watchers were hoping that Golden Week — the Chinese celebration of the formation of the Communist Party and the People’s Republic of China — would bring revenue back to world’s largest (and struggling) gambling center.
But it did not.
Wells Fargo estimates that Golden Week gambling revenue was down a massive 33% from last year. Because of that, the bank expects Macau’s October gambling revenue to fall 20%-23% from last year. That’s worse than the worst months of 2009, when revenue fell 18%.
This is the continuation of a troubling trend. September saw the worst numbers for Macau gaming revenue since the financial crisis — down 12%-13%. This summer was the worst for revenue since 2012. As a result, casino companies like Las Vegas Sands were banking on Golden Week to give them a boost.
Indeed, hotels across the island were fully booked with families on vacation for the holiday — that was giving analyst one reason to be optimistic.
Another reason — a recent story out of China said that the government would wind down its corruption campaign against wild, over-spending party officials. Casino stocks surged as investors hoped this would bring more high-roller money (the best kind of money) back to the island.
But it did not.
The retail customers who came for Golden Week didn’t gamble or spend enough to compensate for the lack of high-roller activity.
“While visitation to Macau was strong during GW at +14 yr/yr, we believe highroller visitation continues to trend negatively. Additionally, reports suggest HK retail sales were down as much as 1550% during GW, with particular weakness in jewelry and watches,” Wells Fargo wrote.
All of the factors that have been hurting Macau’s gaming revenue aren’t going away any time soon. China’s economy is slowing down. The government isn’t loosening monetary or housing policy despite ugly numbers in sectors across the board — property, industrial production, foreign investment — you name it.
In other words, Macau will not be rescued. At least not for the time being.
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