Will The Macau Casino Market Continue To Suffer?
The Venetian Macao resort of Las Vegas Sands’ resort is among some of the most popular and successful resorts and casinos that Macau has to offer. The owner of the Sands’ has long reaped the financial benefits of running a luxury resort and casino however, there is now fear that a certain deadline will change everything. Casino owners in the Macau gaming market have seen a sudden plummet in profits over the past two years, and now things may be getting even worse.
Based on an earnings report from Las Vegas Sands, profits appear to have taken a significant dive during the second term, but has a major increase in gaming profit. Such an increase had not been seen in two years. The increase in gaming profit gave casino owners hope that their business may experience an increase in revenue over next year or so.
While the possibility of a financial increase is exciting, casino owners also fear that they may soon have to compete with new casinos that are expected to launch within a few short months. The three new major casinos will force current casino owners to share their already scarce customer base with new, more exciting gambling opportunities.
In 2015 the number of casinos in the Macau market totaled to 35. After an act of corruption, Beijing started to interfere with the casinos financial sources. It is because of Beijing’s corruption and the weakening economy in China that casino owners began to suffer such a decrease in profit.
While it is possible for the casinos to be saved, experts fear that it may be too late. All concessions and sub-concessions come with a validity period of 20 years. This means that by the year 2020 majority of the casinos will be up for renewal. The deadline has casino owners fearful that they may experience even more of a downfall as it slowly approaches.
The Japanese brokers firm Daiwa Capital Markets states that there is hope, and that they believe change is coming. While they make no promises, they say there is a small possibility that the Macau casino market could see a much-needed turnaround in the near future.
