Macau Gaming Revenues Down 2.6% in 2014, Affecting Several US Gaming Companies

Macau’s gambling industry faced its first economic downturn in 10 years, due to a crusade against corruption launched in Beijing. The fact that the crusade is unlikely to abate anytime soon was underscored by Xi Jinping’s visit to the gaming enclave a couple of weeks ago. In that visit, Xi told the leaders of Macau that they need to diversify their economy and stop relying only on gaming revenues.

According to official figures, gambling revenue fell 2.6% in the city in 2014, from its previous high in 2013. The decline is largely the result of too few high rollers at the baccarat tables, because those are the communist party officials, corporate executives, and financiers being investigated for corruption at present.

$44 Billion in Revenues in 2014

The decline can be overstated, of course. Macau’s gaming revenues were $44 billion, which far outstrips any other city in the world. Las Vegas makes about $7 billion each year, so Macau raked in six times the amount of Las Vegas in 2014.

At the same time, those numbers reflect the first half of 2014, which was like night-and-day compared to the second half of 2014. The decline in revenue from December 2013 to December 2014 was 30%, as opposed to the meager 2.6% decline throughout the year.

Projection of $32 Billion for 2013

If those numbers become the trend, then Macau’s yearly revenues can be expected to be in the $30 billion to $32 billion per year. While that’s still impressive (perhaps 4.5 times Las Vegas’s numbers), revenues in that range would have a far-ranging impact.

For instance, Wynn Resorts and Las Vegas Sands Corporation each have plans for expansions and new developments in Macau. Such projects take years to plan and complete, often taking into account projections for the next 5 to 10 years.

Examples of Unhealthy Optimism

When an unexpected economic downturn happens, plans made in good times often founder. One can look at the case of the Mohegan Sun, which began mass expansions in 2007 and 2008. That huge investment now looks like a foolish decision, but only because the Global Recession of 2008 and 2009 happened when it did.

The case of Revel Casino, a $2.4 billion development in Atlantic City, is another good example. Revel was planned years in advance to its opening in April 2012. By the time it opened, it was beset with huge

Dark Cloud over the City

No one assumes Macau is going the way of Atlantic City, but the danger of a government intervention is going to hang like a Sword of Damocles over Macau for years to come. Anytime a government official (like Xi Jinping) decides to crack down on corruption, Macau and its many high rollers are likely to be an easy target. It should be noted that Xi Jinping’s crackdowns are highly popular with the average Chinese resident.

Sands China and Galaxy Entertainment Falter

Of the six gaming companies which operate in Macau, their stocks averaged a 40% decline in 2014. The two gaming companies on Hong Kong’s blue chip Hang Seng Index–Sands China Ltd. (a subsidiary of Las Vegas Sands Corp) and Galaxy Entertainment Group Ltd.–were among the biggest losers on the stock market. Sands China lost 40% of its value, while Galaxy Entertainment lost 37% of its value.

More than likely, equilibrium of a different sort will be reached. Anti-corruption campaigns always come to an end. Even Stalin’s infamous purges ended at a point. Therefore, the communist party officials and Shanghai businessmen who make up the bulk of the “Asian high rollers” always discussed are likely to return to Macau–at some point. The peak years might have been reached, but the last six months are also likely to be a bit of an aberration.

Philippines Rising

The relative decline of Macao could signal the rise of a nearby country’s gaming industry. One possibility is the Philippines, which is set to open a massive new multi-billion dollar casino in February 2015: City of Dreams Manila. City of Dreams was constructed by the Australian-Chinese company, Melco Crowd. The “Melco” comes from a Hong Kong based gaming company, which is owned by Lawrence Ho, son of the King of Gambling, Stanlley Ho. The “Crown” refers to Crown Unlimited Group, the biggest Australian gaming company.

City of Dreams Manila is not the only development, though. The Japanese gaming machine manufacturer, Universal Entertainment Corp., is one of a group of investors in the Manila Bay Resorts project, which is set to open in late-2015. With Macao’s gamblers concerned about Beijing’s oversight, many are likely to find foreign venues to enjoy their gaming hobby. That could open the door for the Philippines. Experts believe South Korea and Vietnam either one might gain the biggest advantage, if the current situations continues for any length of time.

About Cliff Spiller

Cliff Spiller has been an online writer for 14 years. He worked for Small World Marketing for a decade, where he covered topics like gaming, sports, movies, and how-to guides. Since 2014, he has blogged about US and international gambling news on,, and

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