China's anti-corruption campaign is creating ripples in Macau, with Wynn Resorts reported that revenues fell in the third quarter because of a big drop in the number of high-rollers visiting casinos in the Chinese territory.
The company owned by flamboyant gaming tycoon Steve Wynn said revenues from VIP gamblers - Chinese punters who gamble in special rooms in casinos - in Macau plunged 17 per cent from last year to $25bn.
This sparked a 5.6 per cent decline in overall turnover in Macau, which caused group revenues to fall 1.5 per cent even though revenues from operations in Las Vegas rose 9 per cent over the same period.
Xi Jinping, China's president, is aggressively pursuing an anti-graft and austerity drive that has hit everyone from top party officials and military officers to wealthy Chinese who like to play baccarat in Macau, the former Portuguese colony that is the only place in China where gambling is legal.
Macau has seen spectacular growth since it abandoned a monopoly gambling system in 2002 and allowed six operators, including Sheldon Adelson's Sands China and James Packer's Melco Crown, to open casinos.
The gaming companies have gained from a fast-growing economy across the border in mainland China that has propelled both the number of mass-market tourists and wealthy Chinese gamblers who visit the tiny enclave. The massive growth in Chinese punters helped Macau last year leap past Switzerland to become the world's fourth richest territory per capita, according to the World Bank.
But in recent months, questions have been raised about future prospects as Mr Xi's campaign has started to bite. Gaming revenues have fallen year-on-year for the past four months as wealthy Chinese become more nervous about being seen gambling in Macau.
Experts say the rest of the year will remain tough since Mr Xi is expected to visit Macau in December for the 15th anniversary of the territory's return to China, which is making wealthy Chinese and particularly government officials even more cautious about visiting.
Casinos also have been forced to ban smoking in most parts of their properties from this month, which is expected to dent their businesses. In addition they are facing increasing labour strife as workers complain they are not reaping enough of the benefits of the boom in Macau that has created many jobs but also has caused property prices in the territory just an hour by ferry from Hong Kong to spiral higher.
AP cited Mr Wynn as saying that he was unsure how long the tougher conditions in Macau would prevail, saying he did not know whether it was a "squall or the rainy season".
While Wynn reported a significant fall in gambling revenues in Macau, the company said adjusted earnings before interest, tax, depreciation and amortisation (ebitda) fell only 1.1 per cent to $326m in the third quarter. For parent group Wynn Resorts, adjusted ebitda rose 5.3 per cent to $459m.
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