WYNN MACAU (OTCMKTS:WYNMF) signaled a horrible indication for Macau casino segment with the start of the third month of 2015. Wynn Resorts, a global gambling entity controlled by Steve Wynn, is prompting staff at its Wynn Macau location to opt for unpaid leave for the first time in the past so many years. It is the first time the company is giving warning signs since the financial crisis. As per Hong Kong’s The Standard, the industry is facing short of customers that used to visit the island for gamble.
The instructions of Wynn Macau staff can be just the latest measure in a steep march to the bottom for gambling region. The revenue from gambling on the island declined last year. It was the first time the gambling revenue decline since the statistics has been tracked. The gambling revenue in February declined 49% from the same month a year ago.
The gambling industry was once supported by globe-trotting super rich VIPs who used entities called junkets to finance their gambling bets. The problem started when President Xi Jinping formulated an anti-corruption drive. Since that time, the ultra-rich VIPs refrained from indulging in junkets. Last decline reports began circulating that casinos were going to install cameras in the private areas where high rollers played. The move came as a shock and, as a result, in 2014 almost 16% of junkets on Macau shut down. The impact is evident in the performance of WYNN MACAU (OTCMKTS:WYNMF).
The move not only affected the VIPs, but also retail customers. The Communist Party stated that it doesn’t want retail clients gambling away their funds either. The government intends for a crackdown on visas to Macau. It will monitor all the transactions that are made on UnionPay which is the only domestic bank card in China. If the condition deteriorates, it will become tough for Wynn Macau and other casinos to post strong performance in coming period.