Macau has broken a 26-month period of decline with a 1.1 percent upswing in revenues, driven in part by a spate of new resort developments.
[dropcap]C[/dropcap]asino shares rallied on Thursday after Macau revealed a 1.1 percent rise in gross gambling yield for the month of August – the first signs of an upswing after a 26-month dip.
According to data from Macau’s Gaming Inspection and Co-ordination Bureau (GIOB), revenues surged to 18.8 billion patacas ($2.4bn/ €2.1bn) last month as some major new developments opened their doors to visitors.
One such development – Wynn Resorts’ $4.2bn Wynn Palace, complete with $200m worth of Chinese art and antiques and a $100m – has been credited with pulling fresh swathes of new faces to Macau after a long-term drop off in visitor numbers.
The true test of Macau’s recovery will come over Golden Week – a major public Chinese holiday taking place in October – when analysts expect an influx of tourists to the city.
“We need to wait for at least one more month to see if growth can be sustained, and if new casinos will bring more visitors during the peak Golden Week,” China International Capital Corp. analyst Chris Kwai told Bloomberg.
“Compared with no growth or even a slight drop, an uptick is a big impact on market sentiment.”
On the Hong Kong stock exchange, shares in Wynn Macau soared by 7.2 percent on Thursday, while Sands China jumped 6.4 percent to a five-month high. In New York, Wynn climbed by 5.5 percent to $94.25 and Las Vegas Sands saw a 4.3 percent uplift, taking its share price to $52.38.
The news has been taken as the first signs of success for Macau’s latest strategy to diversify its income base. Revenues in the region have been slipping on average 1.5 percent every month since 2014, owing to the Chinese government’s forceful crack-down on corruption.
This has prompted Macau to move away from its previous VIP-focussed approach in the aim of attracting greater numbers of mass-market gamblers – a strategy that now seems to be paying off.
According to data compiled by Bloomberg Intelligence, gaming revenues from recreational mass-market players took an 3.2 percent upturn in July, whilst revenues from high-stakes VIP gamers dropped off to the tune of 11 percent.