Macau casino revenue fell to the lowest since November 2010 amid China’s slowing economy and a graft crackdown that deterred high rollers. A surprise easing of Chinese travel restrictions to the city may bring some relief.
Gross gaming revenue in June fell 36.2 percent to 17.4 billion patacas ($2.2 billion), the 13th straight month of declines, according to data released by Macau’s Gaming Inspection and Coordination Bureau. That compares with the median estimate of a 38.3-percent drop from six analysts surveyed by Bloomberg.
The last time casinos got so little money from gamblers in the world’s largest casino hub was in 2010, when monthly revenue averaged 15.7 billion patacas. Analysts expect the loosening of the travel restrictions, which they saw as a major reason for Macau’s casino downturn, to help support the market.
“We believe this is a positive development, no two ways about it,” DS Kim, an analyst at JPMorgan Chase & Co., wrote in a note on Wednesday, before the revenue data was released. “This might be a sign that, the governments may want to stabilize Macanese economy before things go a little too far.”
The Macau government announced overnight a reversal of the transit visa policy that was tightened exactly a year ago after it was used by some high rollers and junket agents to gain multiple entries into the city.
From July 1, mainland China passport holders transiting through Macau are allowed to stay in the city longer and more frequently. They can stay seven days in Macau, up from five days and gain second entry within 30 days, rather than 60 days.
Macau casino operator Melco Crown Entertainment Ltd. surged 9.7 percent in New York trading, the most in more than three years after the visa easing was announced. Las Vegas Sands Corp. and Wynn Resorts Ltd., which rely on their Macau units for at least 60 percent of their revenue, closed 4.9 percent and 5.1 percent higher, respectively. The Hong Kong stock exchange is shut on Wednesday due to a public holiday.