China to help Struggling Macau Casino Industry

China to help Struggling Macau Casino Industry

The Chinese government wants to immediately help the Macau casino industry, which has seen its revenue plummet this year.

The liaison office between Mainland China and Macau believes that Beijing officials are currently working out ways that they can help right the Macau economy again, especially in the gaming sector. It appears that Beijing is alarmed that their special administrative area has now seen casino revenue decline for 16 straight months.

Steven Wieczynski, a gaming analyst at Stifel Nicolaus Capital Markets, believes that most of these measures will be aimed at helping improve tourism numbers in Macau.

“Easing of visa restrictions, easier border crossing measures and continued infrastructure improvements could be a few that come to mind,” Wieczynski said when asked about potential government aid.

However, as the Las Vegas Review-Journal reports, Wieczynski doesn’t see the anti-corruption campaign that’s happening all over China to slow any time soon. And this will continue to hurt Macau, no matter what else the government does to help out.

Through September, Macau casino revenue has dropped 36 percent when compared to the first nine months of last year. This comes not long after the area earned about $45 billion in gaming revenue in 2014, just 2.6 percent less than when they set a record in 2013 with $45.2 billion.

A huge problem for the area is that the anti-corruption campaign has scared off many high rollers, who, in the past, really drove the region’s gaming industry. Many VIPs are staying away from Macau until the government crackdown ends, or at least slows down some. There’s no telling when this could be, but for Macau casino operators, it couldn’t come soon enough.

For the time being, though, it looks like the government will help out in small ways by possibly easing ways for tourists to visit the world’s biggest gambling destination.

J.P. Morgan gaming analyst Joe Greff believes that any measure, no matter how small, would be a great service to turning things around in the gambling haven.

“To state the obvious, any potential measures to help Macau’s visitation would be a big positive for the industry,” said Greff.

Despite the massive revenue decline this year, Macau still pulls in about 6 times what Las Vegas, the world’s second-biggest gambling destination, does in casino revenue. But it’s clear that Chinese officials don’t want to see this ratio fall any further.

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