Macau, the world’s biggest casino hub, posted a drop of 9.6 percent in gambling revenue for May, with the pace of decline accelerating from the previous month, as wealthy gamblers continued to steer clear of the southern Chinese territory.
May marked the 24th consecutive monthly drop for the former Portuguese colony, where monthly revenues have shrunk by half in the last two years and hit lows not seen in over five years.
Macau, the only place in China where casino gambling is legal, has been hit by a protracted anti-corruption campaign that targeted officials and politically linked businessmen, and slowing economic growth in the world’s second-largest economy.
Gambling revenue for May fell 9.6 percent to 18.4 billion patacas ($2.3 billion), government data showed on Wednesday, a steeper drop than analysts’ expectations for a 6-7 percent fall.
Macau’s economy is critically reliant on casinos, with the gaming industry accounting for over 80 percent of government revenues. Economic growth in the tiny territory, home to 600,000 people, shrunk 13 percent in the first quarter, government data showed this week.
The central government in Beijing and local officials have pushed casino operators, including Sands China, Wynn Macau, MGM China, Galaxy Entertainment , SJM Holdings and Melco Crown, to diversify their offerings away from glitzy casino halls into a more wholesome tourism offering.
This year three new mega resorts are due to open with features including a 50 percent scale version of the Eiffel Tower, a large lake fronted with a gondola ride and ultra-luxury shopping and dining, as operators try to appeal to a broader type of customer than the traditional hardcore gambler.
While revenues have tumbled, many industry experts are confident the worst is over but remain cautious in the near term, citing a gradual recovery rather than a quick rebound.
“Long-term, we believe Macau can capitalize on the rising Chinese demand for holiday leisure travel,” said Vitaly Umansky, analyst at Bernstein in Hong Kong.
The impact of slowing revenues has taken a toll on the industry with the number of gaming-related crimes up by 11 percent in the first quarter due to an increase in loan sharking and false imprisonment in casinos. Overall general criminality fell 7.1 percent.