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Macau Gambling Industry Decline – Is US-China trade war all to blame?

Macau has been one of the gambling hubs. However, the gambling industry is kneeling for some time now in Macau. The constant decline in the year by year performance in the Gross Gambling Revenue of Macau has raised many eyebrows. The major narrative for this decline has been the US-China Trade war. The two biggest economies of the world are at loggerhead and many observers believe that Macau is facing the wrath of the situation. Macquarie Capital, however, defer from most of them. The investment firm understands that the trade war isn’t the driving factor for the slowing of gambling in Macau.

The firm said that in May when the US-China trade kicked off, the Gross Gambling Revenue was stable. It was however agreed that the share prices showed movement based on the trade war escalation, but the heavy impact was ruled out. It further added that the VIP volumes did not react to the trade war. The Macquarie Capital identified the weaker domestic economic activity in China as the prime reason for the slowdown. The private industries have remained week and did not get intended support, argued the investment firm.

However, to conclude, the led analyst of the firm said that VIP volumes would not alter much unless the shadow lending policy is loosened. The shadow lending policy might help to buy opportunities but the Macau share prices can still kneel under the trade war bus.

However, many others have differed from Macquarie Capital and pointed out the various other activities as the core reasons for Macau gaming slowdown. Hong Kong protest is one of the primary reasons identified by them. Neighbouring Hong Kong has disrupted due to the protests. Several flights to Macau are canceling every day. Matt Maddox, CEO of the Wynn Resorts echoed the opinion and said that the canceling flights do impact the premium end of the business in Macau.

But it is not only the flights that are impacting Macau gambling scenario. The Shun Tak Centre of Hong Kong from where the ferries are carried out to Macau has an important tale to tell as well. The decline in the ticket sale from Hong Kong to Macau has been 30% or more. The protests are the core reason behind it.

Macau has seen tremendous growth in the gambling industry in the last decade. However, the recent socio-political and economic challenges have thrown the industry out of the gear. However, the gambling hub hasn’t impacted largely due to these challenges apart from seeing a steady decline. The industry is still economically sound and hoping to recover when the issues are resolved.

Source: https://calvinayre.com/2019/08/09/casino/us-china-trade-war-not-impacting-macau-as-much-as-thought/

About the author

Debopom Sanyal

Debopom Sanyal

Debopom is a web journalist and news enthusiast. He has been writing about world politics, science, health, finance, and technology. An avid sports enthusiast, Debopom has done his Masters in Finance and Bachelors in Engineering.

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