Macau is thought to be the world’s biggest gambling destination. Unfortunately, this city has struggled to generate revenue from its gambling operations over the past few years. Interestingly, one of the largest US-based casino companies continues to invest here. Las Vegas Sands is taking risks in Macau. Will this pay off?
There are many factors contributing to Macau’s recent decline. Today, we’re going to look at why Vegas Sands has continued to invest money into this city. We’ll also look into whether or not Macau will bounce back in the next few years.
Macau Casinos Continue to Struggle
Things haven’t been working out in Macau like they used to. For the past several years, gambling revenue here has been dropping. It’s an unfortunate trend for many of the companies that own and operate major casinos in the city.
Much of this is due to China’s slowing economy. The trade war with the US has had a serious impact on this country. Due to this, people are choosing to hold onto their money. The fact that many Chinese VIP’s are staying away from Macau is lowering this city’s revenue substantially.
There is also the issue of outside competition. Many countries in Asia are working hard to build their casino industries. The Philippines, in particular, is growing its casino market at an unprecedented rate. Reports indicate that this country’s casino industry is now growing faster than both Macau and Las Vegas.
Despite the fact that Macau’s gambling revenue is down, many companies are continuing to invest here. Las Vegas Sands is investing heavily in this city. Is this smart?
Las Vegas Sands Continues to Invest in Macau
Las Vegas Sands was founded in 1988. It’s run by Sheldon Adelson, one of the most prominent gambling businessmen in Vegas. This company is well-known for its many different gambling operations around the world. Interestingly, the Sands has been investing in Macau lately.
It makes sense. Las Vegas Sands already operates a major casino in this city. For many years, this casino earned huge amounts of money for this company.
The issue is that things are starting to change. Gaming revenue in Macau is already down here by 2.4% this year. This past April, gambling revenue dropped by 8.3% from the same time in 2018. It’s a troubling development for this major gaming operator.
The Vegas Sands is investing more than $2 billion into Macau over the next two years. If this city’s economy continues to drop, the Sands Corporation may need to reevaluate its position here. Time will tell.
How About the Sands’ Operations in Las Vegas?
Things aren’t looking quite as bad for Las Vegas casinos. Over the first four months of this year, gambling revenue is down by 1.8%. On the Strip, this gambling revenue dropped by 3.5%.
Some feel that Vegas is simply becoming too expensive. Numbers seem to indicate this is true. Overall tourist visits to Las Vegas have dropped by 1.4% so far this year. This doesn’t mean this city is in trouble, though.
Gambling revenue here is dropping by a very small amount. Unlike Macau, which is seeing major decreases in casino earnings, Las Vegas is losing just slightly more than what was expected.
Las Vegas Sands is taking risks in Macau. This company’s operations in Vegas aren’t in any real danger. We will need to wait and see whether or not Macau can bounce back over the next several years.
Do you think Las Vegas Sands is smart to invest in Macau right now? Will this city’s gambling revenue continue to decrease? Stay tuned for updates on the situation!