Macau casinos post 10-month winning streak as regulatory pressure builds
Reuters
Published Jun 01, 2017 01:45AM ET
Macau casinos post 10-month winning streak as regulatory pressure builds
HONG KONG (Reuters) - Revenues in the world's biggest casino hub of Macau jumped 24 percent in May, beating expectations and posting a 10-month winning streak as wealthy gamblers returned to the southern Chinese territory despite a corruption crackdown.
Gambling revenue in the only place in China where casino gaming is legal rose to 22.7 billion patacas ($2.83 billion), government data showed on Thursday. Analysts were expecting growth of 15-20 percent.
The growth rate was the fastest since February 2014 and the second-highest monthly result this year. Macau has rebounded amid better-than-expected economic growth in China, and from five-year lows set in 2014 when President Xi Jinping launched an anti-graft campaign targeting ostentatious displays of wealth.
Casino operators in the former Portuguese colony have seen their stocks soar over the past 10 months, with Galaxy Entertainment (HK:0027) up 77 percent, Wynn Macau (HK:1128) up 45 percent and Sands China (HK:1928) up 17 percent.
Macau's resurgence will worry rival casino hubs as they claw for business from wealthy Chinese players who contribute the bulk of operators' profits. Macau's revenues are more than 6 times Singapore's and 9 times those of the Philippines.
But it could come under fresh pressure in the months ahead after authorities in May imposed new measures to better control the flow of money through the territory of about 600,000 people.
Last week Macau formed an alliance with the mainland to tackle money laundering and terrorism financing, and beefed up its anti-money laundering framework with a much wider scope and stricter compliance measures.
New security measures including facial recognition at ATM machines are also being rolled out.
There is also increasing pressure on middlemen known as junkets who lure high-rollers with credit and settle their debt afterwards. Macau's gaming regulator says it is making progress in its audits of junkets.
Junkets contribute just over half of Macau's total casino revenues and are a target for money-laundering investigations.
To broaden its revenue stream away from wealthy gamblers, Beijing has encouraged Macau to diversify its attractions and push casino operators to offer more family-friendly resorts.
The enclave opened a new ferry terminal on Thursday after an eight-year delay, which should boost visitor numbers to the neon-lit Cotai casino strip.
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Written By: Reuters
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