Revenue for Macau casinos fell 3.6 per cent in July to $3.5bn, led by a drop in high-roller gaming.
Telsey Advisory Group analyst Chris Jones said that the mass market segment in Macau is also losing ground - and Las Vegas is picking up the slack.
“We believe we are starting to see people relocate their gaming dollars from Macau to Las Vegas,” Jones said. “That's largely been brought on by the government crackdown.”
Analysts have been warning for months of a summer slowdown in Macau VIP gaming after officials arrested several local lenders on charges of illegal money laundering. Gamblers, especially VIPs, often take legal loans to skirt Macau limits on the amount of cash that can be brought to the district.
But Jones said he noticed a broader shift toward Vegas early this year. “Typically we see a spike in Las Vegas gambling ahead of the Chinese New Year (January 24 this year). This year, the momentum never slowed down after the holidays.”
Also, he said, Las Vegas has a more favourable tax rate than Macau. And US gamblers don't have to go through the hassle of repatriating cash won in Las Vegas, like they do with Macau winnings.
“One thing about Las Vegas that isn't talked about a lot is that it’s easier to get a visa to travel from China to the US than in the past,” Jones said.
He sees Macau's hot growth rate cooling permanently because “it's getting to be a more challenging comparison. Macau mass market revenue can't grow at a 35 per cent rate, as in recent years, in perpetuity.”
But like other analysts he also expects Macau to retain its number one spot after the region absorbs the impact of the crackdown. “We don't think you will see Vegas become the ultimate place to go,” he said.
