Wynn Macau struggling to generate revenue as Chinese economy stumbles
Hong Kong, Hong Kong, China (4E) – Wynn Macau Ltd saw its revenue decline from $976.5 million last year to $907.6 million this year. The company is listed in the Hong Kong stock market and its drop is caused by the slowing growth of mainland China’s economy. VIPs and high-rollers make up the majority of Macau’s revenue and without the bets they bring in, the casinos in Macau suffer.
Union Gaming Group LLC analyst Grant Govertsen said via Bloomberg and The Financial Times, “With a global economic recession and leadership changes in China, VIPs are cutting back. This means that junket operations have less working capital on their hands and so they would be less able to extend credit to the gamblers. The velocity of money in Macau will slow down further and affect casino revenue.”
Macau estimates that around 70 percent of gambling-related revenue is generated by casino high-rollers and VIPs. With their curbed spending, the industry has really affected casino revenue. Wynn Macau isn’t the only casino to experience decline in their revenue. The entirety of Macau’s gambling revenue has slowed down. Its growth rate has not experienced a decline like this since July 2009. Last year casino VIPs and high rollers revenue was $32.7 billion for Macau. This year, it is down by $2.4 billion – $30.3 billion.
In a survey conducted by Bloomberg News, “Even though Macau’s gambling revenue increased 12.2 percent in June to 23.3 billion patacas ($2.9 billion), it still lagged the 15.3 percent median estimate of four analysts.”
Despite a decrease in revenue, billionaire Steve Wynn is still certain that Wynn Macau and the rest of the region will recover soon. He plans on erecting a new casino in Macau.
In a statement quoted by The Financial Times, Wynn expressed his confidence: “China represents, at least to our family, a more stable environment, even if things are a little edgier than any place else.”