Date
18 December 2017
Full-year gambling revenue in Macau is expected to have fallen by about a third to US$30 billion. Photo: Bloomberg
Full-year gambling revenue in Macau is expected to have fallen by about a third to US$30 billion. Photo: Bloomberg

How Macau casino business turned ugly

The recent attack on alleged former triad boss Kwok Wing-hung has been linked to plunging casino revenues in Macau and its powerful VIP gambling room operators.

Kwok, also known as Shanghai Boy, was punched in the face by an unidentified assailant while he was having afternoon tea at the Peninsula Hotel on Dec. 21.

Initial local media reports said the attacker had tried to stab him with a seven-inch knife.

Kwok was a partner in VIP gambling rooms at MGM Resorts International ’s casino and Melco Crown Entertainment Ltd.’s City of Dreams resort in Macau, the Wall Street Journal reported, citing unnamed people familiar with the matter.

The rooms are operated by junkets, people who bring rich mainland gamblers to Macau, lend them money and collect their gambling debts.

Their operations used to contribute the bulk of casinos’ incomes, but with Chinese President Xi Jinping’s campaign against corruption and lavish consumption, the entire gaming industry in Macau has suffered. 

Falling revenues forced Kwok’s VIP rooms to close, leaving him with financial disputes and considerable personal gambling debts, the newspaper said.

Police said the assailants had not been arrested, and the reason for the attack on the 57-year-old Kwok remained unknown.

VIP gaming revenue in Macau declined 44 percent in the 11 months to November compared with the overall industry’s 35 percent fall and a 22 percent drop at mass-market gambling tables, the Journal said, citing data from Daiwa Capital Markets.

Full-year gambling revenue is expected to have fallen by about a third to US$30 billion.

Revenue in November was 16.43 billion patacas (US$2.06 billion), the lowest monthly figure since 2010.

Amid the dismal performance of casinos in Macau, shares of the five major Hong Kong-listed gaming operators have fallen an average of 48 percent this year as of Tuesday’s closing price, the report said.

Daiwa expects gaming revenues to fall another 5 percent, while some other analysts forecast a mild recovery next year.

– Contact us at [email protected]

RA/CG

EJI Weekly Newsletter

Please click here to unsubscribe