Macau government could run deficit if casino revenue doesn’t pick up

Macau’s struggling VIP market fell 42.1% in Q1, according to statistics released by the Gaming Inspection and Coordination Bureau (DICJ).

High-rollers lost MOP 37.7b (US $4.72b) at Macau’s baccarat tables in the first three months of 2015, while mass market revenue – including slots and electronic table games – fell 27% to MOP 27.1b ($3.4b). The VIP share of the overall revenue pie came to 58.2%, down significantly from 63% in Q1 2014, which was itself down from its traditional 70% range. The mass market share rose from 36.3% to 41.8%.

Looking closer at the mass category, slot machine revenue was down 26.3% to MOP 2.9b while ‘live multi-game’ products struck the month’s lone positive note, rising 6.3% to MOP 537m. The ‘hybrid’ tables, which combine live dealers with electronic wagering and settlement, are expected to continue to grow, especially with Macau taking a hard line on its live gaming table cap.

Everyone expected the VIP market to be in the dumps but the mass market figure was being closely watched to gauge its ability to mitigate the VIP slide. There is a caveat regarding the mass numbers, as some casino operators reclassified some premium mass tables as VIP midway through 2014 in order to skirt the smoking ban on the mass market floor that took effect in October.