Macau’s New Casinos are Struggling

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In an effort to capitalize on China’s ever-growing middle class, real estate groups built several casino complexes in Macau. Strangely, though, many of these newly constructed casinos are reporting dwindling profits.

Experts Look at Macau’s Stagnation

Macau CasinoGambling analysts believe that there are several reasons for Macau’s economic struggles. In the summer of 2014, the Chinese government cracked down on illicit gambling rings, many of which were based out of Macau. Similarly, various Chinese task forces worked diligently to eliminate sports gambling networks that operated between Macau and China.

Experts also argue that China’s stagnant economy is responsible for the struggles faced by casinos in Macau. To be precise, Macau’s gambling revenue during May of 2015 is only half of the gambling revenue reported by casinos in April of 2014. The stock market has responded to this dip in revenue, and the stock values of Macau’s six largest casinos have also been cut in half.

New Casino Blood Looks to Leave Mark

Investors believe that the key to turning around Macau’s casino industry is building new gambling complexes. The owners behind Galaxy Entertainment recently opened a new casino on May 27. Other casino groups are also planning to build new casinos over the next few years.

Looking Deeper at the Numbers

Citigroup analysts indicate that Galaxy’s new casino branch has done little to revitalize Macau. In fact, total gambling revenue for June of 2015 in Macau has dropped more than 19% from Macau’s revenue totals in May.

At the same time, several indicators now suggest that the Chinese economy is starting to recover. Casino investors believe that a growing Chinese economy will help Macau’s gambling industry.