What Macau Just Said About China’s Economy | Wolf Street.

What Macau Just Said About China’s Economy | Wolf Street.

Few economic phenomena compare to the soaring gambling revenues in Macau since it opened up to foreign casino operators in 2001. In 2002, Macau blew past Las Vegas. It’s the only place in China where the Chinese can go and legally gamble away their money, and it’s one of the key places where they can go to siphon their wealth – however they’d obtained it – out of Mainland China and beyond the reach of the muscular arm of the government. Even during the financial-crisis years 2008 and 2009, Macau gaming revenues grew, despite a horrendous seven-month plunge. 2009 was the worst year on the books, with revenue growth of only 9.6%. The rest of the years, double-digit growth was the norm.

During the first five months of 2014, revenues soared 15.8%. Nothing could stop Macau, or so it seemed. But in June, Macau’s world changed with the first year-over-year revenue decline since the financial crisis. The soccer World Cup was blamed. VIP revenues, which used to account for 66% of total revenues, dropped an estimated 20%, a hole that increased marketing to regular folks couldn’t fill.

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