World Cup
betting lured wagers away from Macau casinos, underscoring increasing
threats to the only Chinese territory where gambling is legal.
The
CHART OF THE DAY tracks monthly sales of lottery tickets in mainland
China, gaming revenue at Macau casinos and the Bloomberg Industry Macau
(China) Gaming Market Index. The equities gauge comprising six companies
has dropped since the end of February, when takings at resorts
including Wynn Macau Ltd. and Sands China Ltd. (1928) climbed to an all-time high. By contrast, lotto sales reached a record 36.1 billion yuan
($5.8 billion) in June, or 1.7 times more than the casinos’ revenue,
the widest ratio since 2009, data compiled by Bloomberg and China’s
finance ministry show.
Restrictions on transit visas for Chinese
tourists, the biggest drivers of revenue at Macau’s casinos, and a
crackdown on the use of China UnionPay Co.’s debit cards this year have
dragged down the growth of VIP gaming segment. The World Cup in June and
July in Brazil further drew gamblers away from tables as people turned
to bet on the global soccer tournament.
“There
were enough incidents in the past months that could create that one-off
discrepancy,” said Louise Cheung, an analyst at Nomura Holdings Inc.
“Keeping an eye on lottery sales is important because it is a convenient
gaming option with more platforms. The constraint is it depends on the
events that people can bet on.”
The Chinese government started selling lottery tickets in
the 1980s through authorized distributors as a way to finance social
welfare projects, according to the Ministry of Civil Affairs. The sports
lottery, which accounted for 43 percent of total ticket sales of 309
billion yuan in 2013, allows ticket buyers to bet on events including
the World Cup, one of the few exceptions to prohibitions on gambling in
the mainland.
Changes in Chinese visitors’ travel habits and a slowdown in the country’s economy are threatening the growth of Macau, Pansy Ho, co-chairman of MGM China Holdings Ltd. (2282), said earlier this month. Competition is also intensifying overseas as South Korea
in March approved construction of its first foreign-owned casino resort
and Japan considers opening up its gaming market. Macau leapfrogged the
Las Vegas Strip to become the world’s largest gambling hub in 2006.
A lottery in China that incorporated
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