Macau’s chief executive forecasts casino revenue to come in at 200 billion patacas ($25 billion) next year, the lowest since 2010 and a further decline from what analysts estimate for the whole of 2015. Casino shares fell.

“We try to be conservative and maintain stability,” Chief Executive Fernando Chui said at a press conference in Macau on Tuesday, after announcing his policy proposals to the city’s legislators for next year. The last time casino takings fell below 200 billion patacas was in 2010, when the industry recorded gross gaming revenue of 188 billion in the Macanese currency unit.

Macau is going through its worst gaming downturn on record as gross gaming revenue fell in October for the 17th straight month amid China’s slowing economy and crackdown on corruption, which deterred high-stakes VIP gamblers from visiting the city. Chui, in his comments, urged Macau’s casino operators to continue balancing their gambling and non-gaming offerings, even as they build new malls and attractions to draw more tourists.

Galaxy Entertainment Group Ltd. led declines among Macau casinos, falling 4.6 percent to HK$23.75 by the close of trading in Hong Kong. The Bloomberg Intelligence Macau Gaming Index dropped 3.4 percent, while the benchmark Hang Seng Index declined 0.3 percent.

Develop Economy

“We will try our best to develop the economy,” Chui said, adding Macau has a surplus of 30 billion patacas. The Beijing-backed chief executive’s projection compared with the 351.5 billion patacas that casino operators recorded in 2014, the city’s first annual decline on record, and the 196.1 billion patacas in the first 10 months of this year.

Takings are forecast to fall 32 percent this year, according to the median estimate of 12 analysts surveyed by Bloomberg, implying gross gaming revenue of about 239 billion patacas.

Revenue decline is expected to widen in November to at least 30 percent from 28.4 percent the month before, and Melco Crown Entertainment Ltd.’s Studio City resort which opened on Oct. 27 is expected to drive demand from mass gamblers “with trends during December holidays a key test ahead,” said Anthony Wong, an analyst at UBS Group AG.

Chui’s forecast is “a conservative expectation” given current levels, said Tim Craighead, a gaming analyst with Bloomberg Intelligence. “We expect the mass-market to stabilize and recover, and we believe the VIP business has structural challenges that aren’t going away any time soon.”

Crowd Control

The chief executive also reiterated the need to step up regulation of the city’s gaming promoters or the so-called junket operators who provide credit to high-end players. His comments came after a case in September where an employee of a junket operator allegedly stole millions of dollars from its investors. 

Speaking at a casino industry panel session held in Macau on Wednesday, SJM Holdings Ltd. Chief Financial Officer Robert McBain said the city’s junket operators are still facing consolidation as the VIP gambling segment has yet to hit bottom. The mass market segment, however, is improving and turning a corner in the fourth quarter, he said.

Macau will continue to assess the city’s capacity to host visitors and study crowd-control measures during holidays, Chui said Tuesday. The city also aims to open its second ferry terminal in the second half of 2016, he added.

Possible crowd control measures by the government aren’t a worry, said Grant Govertsen, an analyst at Union Gaming Group. “The reality is that visitation is down, so I think we have a way to go before we need to worry about bursting at the seams again.”