Hit by the widespread impact of the global financial crisis, Macao's gaming sector saw its revenue continue to decrease in 2009, local Chinese-language newspaper Macao Daily News reported on Friday.
The newspaper said the revenue of the sector in January is expected to be 7.2 billion patacas (911 million U.S. dollars), a 30 percent drop than the same period of last year.
The city's gaming sector showed no sign of getting back on track for rapid monthly growth in January despite the seven-day Lunar New Year holiday (from Jan. 25 to Jan. 31) drew a large amount of tourists from the Chinese mainland and Hong Kong.
The Special Administrative Region (SAR), the only place in China where gaming is legal, registered record gaming revenues of 10.3 billion patacas (1.3 billion dollars) in a single month, according to the figures released by the SAR's Gaming Inspection and Coordination Bureau (DICJ).
Local casino sector generated an average daily income of 169 million patacas (21.4 million dollars) during the holiday period of Jan. 26 to 28, the combined income of which amounted to 504 million patacas (63.8 million dollars), according to the Macao Daily News, without providing any official source.
The daily also said the loss in gaming revenues was partly attributed to the decrease of high roller gambling which usually occurs during the Lunar New Year as the VIP gamblers tends to avoid such entertainment in this time of the year. VIP segment accounts for 65 to 70 percent of Macao's total gaming revenue.
Thanks to the rapid growth in the first two quarters of last year, the island city's gaming revenues surged 31 percent year-on- year to 108.7 billion patacas (13.7 billion dollars). However, its monthly growth started to plunge starting from September last year after a long period of booming development.
Macao is not the only gaming hub in the world that suffers from the impact of the financial crisis. Statistics showed that Atlantic City's casinos generated a total of 4.55 billion U.S. dollars in gaming revenue last year, down 7.6 percent from 2007. Meanwhile, those in Las Vegas fell 9.3 percent year-on-year in the first 11 months of last year.
The economic downturn dealt a blow to Macao's job market as well, since casinos started to lay off employees or order them to go on non-paid leave. As a condition to run casinos in Macao and even being stipulated in legal clauses, gaming operators hired a large number of local residents, who usually have low-level education background, to work as casino dealers.
Two casinos run by Galaxy Entertainment, one of the six gaming concessionaires in Macao, laid off 270 locals, and other operators like Las Vegas Sands also made similar announcement later. The move by the casino companies has aroused many complaints among the locals who blamed the SAR government for granting too many migrant workers to work in the casinos and took away their jobs.
To maintain social stability, the SAR government even planned to provide training courses with allowances to the laid-offs.
As for the prospect of this year, big financial institutions has already predicted that Macao's gaming revenues for the whole of 2009 will drop between four percent and 14 percent. The pessimistic Deutsche bank forecast that the island city's casino revenues will fall 14 percent while Credit Suisse said more prudently that it will just drop four percent, compared with last year.
But local scholars said it is still uncertain whether local gaming sector will continue its downturn development.
Due to the credit crunch and the mainland authorities' decision to tighten the visa arrangement for residents to enter Macao SAR, local casinos earned less in the first three days of the Lunar New Year holiday, "but it was just daily figures, we still need to see if it's a downturn for sure," said Zeng Zhonglu, professor of the Social, Economic and Public Policy Research Centre of the Macao Polytechnic Institute.
He also urged local casinos, to make more effort to boost the mass market and develop non-gaming operations such as shopping and MICE (meetings, incentives, conventions and exhibitions), which will benefit Macao in the long term.
(Xinhua News Agency January 31, 2009)
