Macau casinos eye up profits in China

Wynn Resorts and Las Vegas Sands Casino kingpins are attempting to tempt new Chinese punters such as Li Yunlong, a 28-year-old Chinese project manager who works at a baby milk company in North China’s Heilongjiang province, into their multi-billion-dollar Macau venues.

Li Yunlong travels  2800 miles south to try his luck in the only part of China where casinos are legal, and although he wants to experience gambling but does not know how to play any of the games.

It is thanks to people like Li Yunlong the casino’s gross gaming revenues rocketed to $6.3bn in the first two months of this year up 20 per cent on the same period of 2017.

Macau’s six casino owners  – Las Vegas Sands, Wynn Resorts, US rival MGM Resorts international and another three local players wanted to lure more Chinese gamblers in neighbouring Guangdong province who have invested over $20bn over the past five years after intense pressure from the Chinese government to reduce their reliance on credit-fuelled high rollers.

Following Chinese President Xi Jinping’s nationwide crackdown on corruption and exuberance which resulted in Macau’s gross gambling revenues to fall from a record high  $45bn to $33bn last year.

Non-gaming facilities produce just 12 per cent of total revenue compared to 65 per cent on the Las Vegas Strip, which also hosts major conferences, sporting events and hit shows.

Last year, Macau, Asia’s gaming capital, and former Portuguese colony accounted for 71 per cent of adjusted earnings before interest, tax, amortisation and depreciation at Wynn Resorts and 53 per cent at Las Vegas Sands. There are over 40 casinos in Macau, from the Gondolas and canals at Venetian Macau to the world’s best water show at the City of Dreams.

Last year 33 million tourists visited Macau which is less than one-tenth size of Las Vegas, with tourists averaging 1.2 nights stay compared with four nights in Singapore.