The economic climate, visa restrictions and falling stock markets have been blamed for gaming revenue results so far this month in Macau. In the first half of September revenues have been flat after a 44% increase in August and 42% in July. The visa restrictions imposed by the Chinese authorities mean that residents of Guangdong on the mainland may now visit Macau only once every two months instead of twice a month and Chinese residents may no longer use a Hong Kong visa to enter the gambling city.

Whilst the first half of 2008 saw the number of casinos in Macau reach 30, the number of gaming tables and slot machines in the gambling enclave actually fell according to statistics published by Macau’s Gaming Inspection and Coordination Bureau (DICJ). Last week there was concern expressed over the drop in the amount played by high rollers in August, although it was felt that the Beijing Olympics as well as the visa restrictions enacted in June would have been contributing factors in the fall.

Last week the company in partnership with Crown Macau to deliver VIP rolling chip volume, Amax Entertainment Holdings, reported an 18% decrease last month of almost US$1 billion. At the time CEO Ted Chan commented, “We are looking forward to the expected announcement and implementation of a commission cap of 1.25% of rolling chip volume as we believe it will provide a respite from the recent competitive promotional dynamic in the market. This new operating environment will highlight the competitive advantages of our market-leading operating platform, including the extension of liquidity to junket operators in a risk free manner, as well as our unique business model that is based on the world-class quality of our partner’s VIP gaming facilities.”

He added, “Our partnership with Crown Macau remains solid. We look forward to continuing to work with our partner on strategies to further improve performance of the VIP operations at the property and expect that following the implementation of the commission cap we will revise our agreement with Crown Macau in a manner that will benefit Amax, our casino partner, junket operators and their players, and our shareholders.” However, today Amax has had once again to deny rumours that it is pulling out of the agreement and has reiterated its commitment to Crown Macau.

The turmoil in the markets following the failure of Lehman Brothers and concerns over AIG has meant that shares of casino operators with properties in Macau have continued to slide. The likely flat gaming revenue for September has prompted some analysts to express worry about the additional casino openings due next year against a weaker economic backdrop. It may be that glittering Macau will shine a little less brightly in the future. (E-09.18.08)

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