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Economy

Macau gambling revenue rises 14% as anti-corruption drive fades

Mainland visitors return in 2018 but trade war threatens another downturn

The opening of MGM Cotai in February contributed to an increase in visitors from the mainland to Macau last year.   © Reuters

HONG KONG -- The Asian gambling capital of Macau enjoyed a stellar 2018 as openings of family-friendly casino resorts drew customers from mainland China.

Gaming revenue rose 14% on the year to 302.8 billion patacas ($37.5 billion) for 2018, the second straight increase, data from the Macau government shows. Such revenue recovered to more than 80% of its 2013 peak as Chinese President Xi Jinping's anti-corruption campaign seemed to have toned down.

Still, Beijing's trade frictions with Washington could weigh down spending by the affluent this year.

Gaming revenue slumped in 2015 and 2016 as the anti-corruption drive deterred officials from spending extravagantly. But last year, the former Portuguese colony became a hot vacation destination for a broad range of customers as entertainment-filled resorts with theaters, pools and shopping centers cropped up.

Visitors swarmed into new integrated resorts like MGM Cotai, a mega hotel-casino facility opened in February by MGM China Holdings, and a luxury hotel run by Melco Resorts & Entertainment that opened its doors in June.

With the prominence of a new breed of patrons, a type of game targeting VIP guests accounted for just 55% of revenue in the first nine months of 2018, down significantly from 66% in 2013.

The opening of the sea-crossing bridge linking Macau, Hong Kong and the mainland city of Zhuhai also helped bring a flood of tourists to China's only legal gambling hub, which is about three times the market in the U.S. state of Nevada -- home to Las Vegas.

With seven out of 10 visitors coming from the mainland, Macau is susceptible to changes in the Chinese economy, which is showing signs of a slowdown amid the trade war with the U.S.

Gambling revenue will likely decline in 2019, UBS predicted in a December report, expecting the affluent to tighten their purse strings.

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