Macau’s total gaming revenue fell for a year in the first half of 2016, to 107.79 billion MOPs, down 11.4 percent from the corresponding period in 2015, but a recent report by the government says those numbers were within expectations for 2016. The government’s overall forecast for 2016 will have a GGR of about 200 billion MOPs (about $2.5 billion), with an average monthly MOP of 16.6 billion MOPs. The June number was 15.88 billion MOP, 8.5% lower than the June 2015 number.
A government report explained that the GGR for the first quarter of 2016 represents 53.9 percent of what they had predicted for the year. Although their forecast is to narrow the decline, they don’t expect revenue growth in the second quarter to enter positive territory.
Popular market games increased 10% year-over-year in the first half of 2016, accounting for 53.1% of the total market, while still showing a 3.6% decline. VIP revenue continued to decline to 17.3% in the first half of the year. The government pointed to the numbers as evidence that their efforts to coordinate the diversification of the gambling industry have so far been successful.
The government believes Winpalace and Paris Macao, which will open in the Cotai area before the end of the year, will increase tourism and increase the city’s appeal to visitors.
Gaming revenue fell in 25 months, from a high of $45.27 billion to an expected $25 billion, as the Macau government “adjusted” Macau’s gaming industry to focus more on tourism and culture, and shifted away from a specific VIP gambling focus consistent with Beijing’s crackdown on corruption and graft.
Currently, all casino concessions in Macau will expire under the contract, and the government has not yet revealed how it will proceed in Macau. Most analysts predict Macau’s gambling revenue will rise again by then, but no one knows for sure whether current license holders will be allowed to simply renew or if a new competitive bidding process will open. However, the current law (Act No. 16/2001) stipulates that the concession period cannot exceed 20 years, but can be extended once or twice “within a total of five years” (Article 13).
The government also noted its intention to stimulate non-game development in the tourism sector. This is “part of efforts to coordinate Macau’s transformation as a world center for tourism and leisure and to promote the sustainable and healthy development of the city’s gaming industry,” the report said.