Macau officials have announced that the island will post the biggest decline in gaming revenue since the global financial crisis.
Macaus Secretary for Economy and Finance Francis Tam said that year over year casino revenue for the world's largest gambling destination could fall 12%-13% in September.
August also saw a record year over year decline of 6.1%. In June 2009, as the world scrambled to get back on its feet again, Macau gaming revenue declined 18.1%.
There are two main reasons for this first, an overall slow down of the Chinese economy, and second President Xi Jinping's corruption crackdown.
To the first point, China knew that it would have to let its economy cool, tighten policy, and face slower growth at some point but things are happening fast. Numbers are coming ugly.
On Monday night HSBC's China Manufacturing Purchasing Managers Index missed expectations, falling to 50.2 from 50.5. That means it's just hovering above contraction.
August industrial production weakened to its slowest pace since 2008.
China, in response, did a "targeted stimulus" nothing major to inject cash into the system so it seems the government may be waiting to see how bad things get before engaging in any major intervention.
All of China will feel the burn in the meantime Macau's potential high rollers, and its increasingly important potential mass market customers alike.
In other words, a Macau revenue drop isn't going to help China reach it's targeted 7.5% GDP target for 2014 at all.
The other factor at play here is President Xi Jinping's corruption drive. Flashy high rollers aren't letting the cash flow as freely as before, afraid that the government will start asking questions.
The mass market player doesn't like those questions either.
See Also:This Woman's Revolutionary Idea Made Her A Billionaire And Could Change MedicineThe College Majors With The Biggest Lifetime EarningsSteven Wynn Is Suing Jim Chanos For Alleged Slander