HONG KONG: The worst for Macao's gaming industry should have passed despite the drop in the city's casino revenue in the second quarter, according to scholars.

Casino revenue in the three months ended June stood at 25.4 billion patacas ($3.18 billion), down 12.1 percent from 28.9 billion patacas in the same period last year, statistics from the Macao Gaming Inspection and Co-ordination Bureau showed.

The second-quarter revenue figure also slipped 2.3 percent from the 26 billion patacas recorded in the first quarter, official figures indicated.

For the first half, casino revenue came in at 51.8 billion patacas, down 12.4 percent from 59.3 billion patacas in the same period last year.

Tourists from the mainland take pictures of Macao's famed ruins of the St Paul's church in the old city center, with the imposing Grand Lisboa hotel/casino resort soaring above the skyline. Bloomberg News

However, scholars and operators generally believe that the worst has passed for Macao's gaming industry.

"We have seen some signs that are indicating a recovery in the sector," Ricardo Siu, an associate professor at the University of Macao's department of finance and business economics, told China Daily.

Davis Fong, director of the Institute for the Study of Commercial Gaming at the University of Macao, also believes that the industry has seen the worst.

He is optimistic that total casino revenue this year could exceed 100 billion patacas.

The fall in casino revenue in the first half was mainly due to a high comparative base last year, the impact of the global financial crisis and the outbreak of the H1N1 influenza epidemic, he told Macao Daily.

Casino operators also voiced optimism about the prospects for the sector.

"Actually, the performance of the sector (in the first half) was not bad if you strip out the abnormal growth during the first half of last year," said Roland To, a director at Galaxy Entertainment Group, one of the major casino operators in Macao.

In the first half of 2008, casino revenue in the city surged 54.5 percent year-on-year to 59.3 billion patacas after several new casinos opened for business while operators launched aggressive campaigns to attract patrons.

But casino operators' luck changed shortly afterwards as punters decreased sharply after the onset of the global financial tsunami and the consequent economic recession in the second half last year, leading to a slump in the gaming industry.

Revenue in the sector has stabilized after hitting a low of 24.1 billion patacas in the fourth quarter of last year, To noted.

"The trend has been improving...We are cautiously optimistic about the outlook for the second half," he said.

As to the odds of a strong recovery in the sector, both scholars and casino operators believe that a sustained recovery in the global economy and easier travel regulations on mainland visitors will be the critical factors.

(HK Edition 07/21/2009 page4)