This year would probably close with a positive perspective for casino industry in Macau, after surviving two years of bad news. Since the Chinese government of Xi Jinping has reinforced the measures against VIP services in the exclusive casino territory in 2014, the gaming venues started perceiving a deep fall in its monthly revenues.
According to the city’s Statistics and Census Service, Macau’s gross domestic product (GDP) increased by 4.0 percent year-on-year in real terms for the three months until September 30. It was the first such quarterly year-on-year rise since the second quarter of 2014 when the city’s economy expanded by 5.7 percent.
The statistics bureau said the local economy’s growth in the third quarter was mainly due to increases in exports of services and in investment. The Gaming service in Macau is included in exports when calculating the city’s GDP. That is in order to reflect spending by tourists in the city’s casinos.
The DSEC reported showed that Macau casinos are expanding by 4 percent year-on-year in real terms in the third quarter of the year. The external demand of the industry grew during the last three months, leading to a further development in exports of gaming services as well as an export of other tourism services.
The period of July to September, exports of gaming services went up by 0.2 percent.
Macau’s GDP performance trends in recent years have coincided with casino gross gaming revenue (GGR) trends in the city, highlighting the importance of the gaming sector to the local economy. The gaming business was negatively affected by a slump in GGR that began in the third quarter of 2014 and extended for two years. Casino GGR in Macau posted its first increase in the third quarter of 2016: it went up by 1.2 percent in year-on-year terms.
Investment analysts covering the sector have attributed the GGR decline recorded in Macau between mid-2014 and mid-2016 to several factors, including the ongoing anti-corruption drive in Mainland China; a slowdown in the Chinese economy; and increased scrutiny by the Macau government focused on the city’s casino junket system.
Also helping Macau’s GDP performance in the third quarter of 2016 was the construction of several casino resorts on Cotai. Two new large-scale properties the Wynn Palace and the Parisian Macao opened during the July to September quarter.
In the first nine months of 2016, Macau’s economy contracted by 5.4 percent year-on-year in real terms, according to Tuesday’s data.
The investment of major casino companies, such as Sands Corporation and MGM Resorts, has boosted the Asian market and may lead to a continuous growth in the next months.
