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How The Soccer World Cup Affected Macau gambling Stocks

2019-11-07

How The Soccer World Cup Affected Macau gambling Stocks

Macau casinos experienced a dramatic slump during the second part of 2018. The stocks of the top six houses recorded a substantial drop in valuation, causing jitters among investors. Investigations revealed revenue from VIP gamers was declined due to fewer visitors.

Macau is the world’s gambling capital, and casinos operating there have historically delivered better returns than elsewhere. However, income from VIP gamers, the most lucrative clients, started falling mid last year. This caused a sharp drop in the valuation of the major casino stocks due to reduced prospects for growth in VIP gaming revenue.

How Casinos Operate

Most casinos in Macao have a business model based on attracting VIP gamers from the mainland. These clients called whales, play Baccarat. Indeed, VIP Baccarat is so lucrative that it contributes over 56% of gaming revenues. The performance of VIP baccarat bets directly impacts the valuation of Macau casinos in stock markets globally. Readers may wonder how VIPs influence the returns of a game whose outcome is not reliant on skill. It turns out that most of them are soccer fans. During the World Cup held in Russia, the whales stopped playing, preferring to watch the best soccer players in the world in action.

Gaming houses stack betting odds in their favor such that they always earn more than the players. This dynamic, otherwise known as the ‘house edge’, is what makes casino businesses worth billions of dollars. As it is, gamers are unlikely to win at a house with a big edge.

Baccarat is similar to roulette because it does not require much skill, and choices do not affect a player’s outcome. Its simplicity makes it a favorite for many players because all they do is place a bet. The other attraction is that it has better odds than other games of chance.

Business as Usual

Macau’s position as the gambling capital of the world remains sound due to the huge flow of clients from mainland China. If anything, visitor numbers are growing while their disposable income is increasing as the Chinese economy continues to expand. Recent figures indicate that clients are spending more than in the past.

The June-July 2018 slump in stock performance caused jitters among investors, but it was just an aberration as all the fundamentals are fantastic. However, the over-reliance on VIPs has raised concerns about the sustainability of their business model. In the meantime, VIPs have returned to play their favorite game, and stocks have rebounded.

Macau Casino Stocks Slump During the Soccer World Cup

Revenue from VIP gamers at Macau casinos declined towards the end of 2018 due to reduced client volume as Clients switched to the soccer World Cup.

Online Casino Gaming: More Popular Than Ever Before

2020-09-30Playing online casino is getting increasingly popular in the UK. Why is that? What is it that attracts so many players to this kind of leisure activity? And what are some of the most popular online casinos? Find out more about it, here in this article. A recent study, published by the BBC, indicates that online casino searches were at an 'all-time high' during the COVID-19 lockdown. It does make sense to a certain degree that people search for new kinds of leisure activities during harsh times. However, this is merely just the continuation of a longer trend of increased popularity for casinos.

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Fundamental Poker Strategies

2020-09-28Newbie poker players usually struggle to make a decent profit consistently from their game. Others struggle to even break even after playing for a long time, which can be quite discouraging. The main reason behind that is usually the use of wrong strategies or failure to use any strategy. Experienced players are known for their mastery and use of effective poker strategies. The choice of strategy to use for any game depends on various factors, such as skill level of opponents and type of poker played. Some of the strategies that can make the difference between experienced players and beginners are highlighted below.
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