The new director of Macau’s Gaming Inspection and Coordination Bureau, Paulo Martins Chan (pictured), says the worst is now over for the city’s gaming industry.
In an interview with the Portuguese-language channel of public broadcaster Radio Macau, Mr Chan said that the decline in casino gross gaming revenue (GGR) should slow down this year.
Casino GGR in Macau has slumped for 21 consecutive months since June 2014. Investment analysts have said the sector has been weighed down by factors including the Chinese central government’s anti-graft campaign and China’s economic slowdown.
Market wide gaming revenue in Macau for 2015 declined 34.3 percent compared to the previous year, according to official data.
Casino GGR was at near standstill year-on-year in February. The accumulated gaming revenue for the first two months of 2016 stood at nearly MOP38.20 billion (US$4.78 billion), a decline of 11.8 percent judged year-on-year.
Mr Chan told Radio Macau that he expected the losing streak in the gaming industry to have continued in March, but noted that the sector was starting to show signs of stabilisation.
“The most difficult times are now behind us. I think that, if there’s a decline [in casino revenue] this year, it will be a slight decline,” Mr Chan said.
The head of Macau’s gaming regulator said he expected casino GGR for full year 2016 to fall “about 10 percent” compared to the previous year.
Brokerage Daiwa Securities Group Inc said in a note on Wednesday that it remained “sceptic” regarding recent market commentary that had suggested “robust footfall” in Macau’s casinos, supporting the argument for mass-market stabilisation in Macau.
In February the number of mainland Chinese travelling to Macau under the Individual Visit Scheme fell 11.5 percent year-on-year, according to data from the city’s Statistics and Census Service.
“Our ground checks in Macau last week were sobering, with industry participants sharing an overall air of cautiousness about the sector’s near-term prospects,” said Daiwa’s gaming industry analysts Jamie Soo and Adrian Chan.
“Indeed, we remain sceptic of the street’s recent bullish change of view and the sustainability of the recent share-price rally,” they added.
Mr Chan also commented on the alleged fraud case involving tens of millions of U.S. dollars that rocked the Macau VIP gambling segment in September last year. At the time, Macau junket operator Dore Entertainment Co Ltd announced it had been a victim of internal fraud by a former employee.
The head of the Macau gaming regulator said that investors in the cage operations of Dore should be divided into three separate groups. The first group included “investors that have documents” regarding such investments and that are also “registered in Dore’s accounting documents”.
“Even Dore recognises that such investments were made,” the official told Radio Macau, adding that the junket operator was currently negotiating with those investors to settle. Mr Chan said the claims made by these investors involved about MOP80 million.
The second group of investors included people that claimed to have invested in the cage operations of Dore, but of whom the junket operator “has no registry of such investment”. Mr Chan said those cases should be settled in court.
Finally, the third group of investors included people that claimed the Dore employee that allegedly absconded with investor capital also took their deposits. “The latter is connected with a crime and is being investigated by the police,” said Mr Chan.
The Chinese-language channel of Radio Macau reported that about 40 people claiming to have invested in Dore’s operations met on Wednesday with the lawyers representing the junket firm. Mr Chan was reportedly also present in the meeting.
A person representing the group was quoted saying that there were currently over 60 people that had not recovered the money they invested in Dore, involving an amount of up to MOP800 million.
“We hope that the issue can be resolved soon. Mr Chan is also actively engaged with the lawyers representing Dore to seek a solution,” said the representative.
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