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Macao’s Revenue per Visitor Continues to Fall

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Overview

Las Vegas and Macao are the major gaming hubs in the world. Macao is the largest gaming hub in the world. It’s the only place where gaming is legal in China. The casino industry is dominated by major players like MGM Resorts (MGM), Wynn Resorts (WYNN), and Las Vegas Sands (LVS) that operate in Las Vegas and Macao. Other major casino operators in Macao include Galaxy Entertainment, SJM Holdings, and Melco Crown Entertainment (MPEL).

A good way to gain access to these companies is to invest in funds like the VanEck Vectors Gaming ETF (BJK). For broader exposure to the leisure space, you can invest in the Consumer Discretionary Select Sector SPDR Fund (XLY).

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Revenue per visitor

Macao’s gaming revenue per visitor was at 999.6 Macanese pataca in May 2015—a rise of 6% from 942.4 in April 2015. The rise came after a huge fall in April 2015. The revenue per visitor fell by 20% in April 2015 to 942.4 yuan from 1184.9 yuan in March 2015.

However, on a YoY (year-over-year) basis, Macao casinos’ revenue per visitor has been falling since June 14 when the stricter regulations were imposed. For May 2015, the revenue per visitor fell by 38% to 999.6 yuan—compared to 1,604.6 yuan in May 2014.

Key takeaways

The fall in revenue per visitor is mainly attributed to the fall in VIP visitors’ traffic. This naturally spells trouble for casinos. It has been directly impacting their top lines. Now, most casinos are shifting their focus to mass market gambling in order to revive the revenue.

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