Actually, 2013 was not a bad year for Macao at all, with gaming revenues rising 19 percent. While Macao peaked in 2013, with a $45.2 billion haul, the slippage in 2014 was not alarming, only 2.6 percent. The bottom, however, began falling out the market in June of that year and looks even worse than it is (i.e., bad) by the fact that it’s being measured against record-setting previous years. For instance, February 2014 was the most lucrative month in the history of Macao’s casino industry.
But the casino enclave has now seen eight consecutive months of declining grosses. This past February, brought in 49 percent less revenue. (This was actually a relief to the stock market, which was expecting a 55 percent dive.) Several of the six casino operators have megaprojects opening either in late 2015 or early-to-mid 2016 … Melco Crown Entertainment’s Studio City, MGM Cotai, Wynn Palace. Casino executives and Wall Street analysts are hoping against hope that these will stir customer curiosity and consumer traffic sufficiently to reverse Macao’s recent slide.
Casino stocks that trade on the Hang Seng Index in Macao, affected by 2014’s downward trend, took the stock exchange down with it. The average decline in stock price was 40 percent. Recovery from these doldrums is not expected until the end of 2015.
The causes of the decline are manifold. Foremost is the Chinese government’s crackdown on official corruption. This has scared VIP players into playing less or taking their action elsewhere (such as Australia). As Steve Wynn put it, the closer government oversight has "put a lot of the wealthy businessmen in the foxholes."
Mass-market play has been depressed by new restrictions on visas into Macao. And if you can get in and you’re a Chinese citizen, you’ll find that you can draw down less money from your UnitedPay cash-access cards. Chinese President Xi Jinping has made it abundantly clear that he’d like to see economic diversification in Macao, so the dilution of the casino market plays right into his plans. "I don’t think people see the central government as a threat. They see it much more as the last resort for things to change," political pundit Éric Sautedé told the Wall Street Journal.
Future casino development is crimped by a government quota on the number of table games that will be allotted to new casinos (though some companies may move tables from older casinos to newer ones, in a sort of cap-and-trade policy). Also, labor is in short supply and nothing riles the Macanese populace so much as the use of guest workers from the mainland. So the future is cloudy. Or, as Wynn put it, "I don’t know whether it is a squall or we are in the rainy season or how long it will last," adding, "we are still very, very bullish on Macau."
