The casino industry in the biggest gambling hub in the world has declined for 17 straight months in the midst of an anticorruption crackdown that targeted VIP gamblers from Mainland China and corrupt officials who spent large sums of money in Macau’s casinos.
The constant pressure applied to the casino industry caused VIP gamblers from the Mainland to stop visiting Macau and as a result the casino industry lost billions of dollars.
The anticorruption crackdown which started in early 2014 continued in 2015 and analysts believed that it might extend even into 2016. However gaming analysts believe that the Macau government will have to relax its strict stance on the gambling industry sooner rather than later as the government gets close to eighty percent of its budget from the gambling industry.
Union Gaming Securities Asia Ltd recently checked with a number of internal sources before going on record to state that the Macau government plans to relax its transit visa rules in an effort to encourage tourism to Macau. This is the second time in 2015 that the government had decided to relax its visa restrictions and this unofficial announcement immediately had an impact on the casino industry share prices. Casinos believe that this could be the first clear indicator that the government is looking to be more liberal with the casino industry and help the market to recover.
Grant Govertsen, an analyst at Union Gaming released a statement which said
persons entering Macau (ostensibly) for the purposes of transiting to a third party country would be allowed to stay for up to 14 days (from 7) upon one’s first entry into Macau during any given month, and would then be allowed to stay up to 7 days (from 2) for a second entry during the same month
This relaxed transit visa scheme will especially benefit junket operators who specialize in brining VIP gamblers over to Macau. The new transit visa rules will also to a certain measure help premium mass market players.
Govertsen believes that this announcement will most likely mean that the worst days for Macau’s casinos are now behind them and that the casino industry can look forward to bringing in more customers and building their declining revenues. The government is yet to make an official announcement on these proposed visa changes but Li Gang from the Central People’s Government Liaison Office in Macau had confirmed a few weeks earlier that the government would be rolling out changes to help Macau’s struggling casino industry.