When the Chinese economy is booming, Mainlanders head to Macau to wager some of their disposable income at casinos. When the economy decelerates, sort of like what's happening at the moment, gamblers stay home because of economic pessimism.
New data from the Gaming Inspection & Coordination Bureau, first reported by Bloomberg, shows gross gaming revenue for Nov. was $2.8 billion, down 8.5% YoY.
Year to date, gross gaming revenue sagged 2.4%, comes at a time when the Chinese government has told its citizens to embrace lower-economic growth.
Macau's gross gaming revenue is expected to record its first yearly decline since 2016, as several headwinds have developed.
Several months ago, JP Morgan analyst DS Kim told Reuters that the casino slump in Macau is due to "social unrest in Hong Kong, tough year-on-year comparison, negative headlines around junkets, and macro headwinds."
Credit Suisse Group analyst Kenneth Fong said Visa policies to Macau had been tightened ahead of President Xi Jinping's visit this month. These restrictions, Fong said, are hurting visitation numbers into the late year.
The Bloomberg Intelligence index of Macau casino operators slipped 3.4% in November. Though the index is still up for the year, it has dropped 20% from a peak in Apr.
Wynn Macau Ltd.HK is down more than 42% since 2Q18 highs.
With no turn up in the China Momentum Indicator, there's a high probability that Macau's gaming industry will continue decelerating into 2020.
World stocks are ignoring the slowdown in China and in the Macau gaming industry.
Gaming industries in Macau and the US appear to exhibit signs of weakness.
The global gaming industry appears weak, as well. Maybe highlights how consumers across the world are pulling back on casino spending as the global trade recession is imminent.