Decline of Sales at Melco Crown

Nationwide crackdown on organized crime and illegal gambling in China has curtailed extravagant bets and stakes from high rolling players in Macau. James Packer’s Melco Crown Entertainment a popular gaming destination situated on the gambling hub has been affected by the new laws put into force by the Chinese Government.

Market analysts have revised their projections and estimate sales for 2014 FY year with noticeable reductions on an average of about 6 percent seen in casino operators functioning in Macau. One of the highest estimated reductions was seen in Melco Crown, a conglomerate partnership between Packer and Chinese gaming big wig Lawrence Ho.

Domino effect

Melco Crown

As Melco is predominantly based in Macau, activity, or in this instance lack thereof, in their in operations has led to a ripple effect in overall performance which in turn influences their standing and stock rating at markets in America and across the world.

Overall economy growth in China has also slowed down, to a pace recorded in 2009. Real estate prices have dropped for the fifth consecutive year in the Republic, proving that despite market estimates of Macau being unaffected by macroeconomic changes, it has played a role in the decrease in gaming revenue. Though growth is on a slow and steady decline, it is yet to hit rock bottom which leaves time and possibility for it to turn back around.

Uplifting prospects

However the silver lining is evident with Melco as majority analysts covering the enterprise still recommend buy ins on stock. The future looks bright with Melco as they set to build and invest in new facilities in exciting new destinations like Manila. The Cotai Strip is a fresh destination with booming appeal in Baccarat that raced yearly casino revenue up by 18 percent in the region last year.

The corruption clampdown might have put a slight chink in income at Melco, though this has far from dampened future prospects. Packer’s establishments run in Perth and Melbourne continues to rake in loyal crowds, though the casino still took a blow with luck on the roller’s side. High rollers made big wins in Perth and Melbourne who took home large returns unexpectedly. Packer announced this to be simply a streak of bad luck at a recent annual investors meet