Macao sees sharp drop in gambling revenues

Fall blamed on anti-graft drive, slowing economy

Gambling revenue in the world's biggest gaming hub Macao recorded the steepest drop in more than five years in September as the mainland's campaign against corruption and a slowing economy kept big-spending customers away.

Revenues at Macao's 35 casinos fell 11.7 percent to 25.6 billion patacas ($3.21 billion) in September from 29 billion patacas in the same month a year ago, government data released on Monday showed.

The decline was the steepest since June 2009, the data showed, but marginally better than analysts' forecasts for a 13-15 percent drop. Gambling accounts for more than 90 percent of Macao's government revenues, and September was the fourth consecutive month of decline this year.

"The crackdown, transit visa restrictions and other factors have hit revenues and we don't expect this situation to get better anytime soon," said a gaming analyst at an Asian bank in Hong Kong who declined to be named.

Macao is the only place in China where casino gambling is legal, and casino operators have been struggling as the central government's two-year-old anti-corruption drive keeps wealthy mainland gamblers away and slowing economic growth clips demand from so-called mass market gamblers. More than 60 percent of Macao's visitors come from the mainland.

Casino operators are also facing a shortage of workers. Macao, home to just over 500,000 people, is racing to build eight new resorts in the next three years.

Last year, Macao made $45 billion from gambling. This year, analysts expect revenues to grow in the low single-digits at best, which would be their weakest performance on record.

Other factors likely to keep gamblers away from Macao include a ban on smoking in casino floors due to be implemented this month and restrictions by the Macao authorities on the mainland's UnionPay card, which is used to withdraw cash for gambling.