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After seeing a stock market fall leaving the six gambling license holder in Macau down by more than 15%, market analysts are concerned that revenues from the gambling Mecca may not be sustainable, according to a report my MarketWatch.
In the report it was said that affluent Chinese may be lowering their discretionary spending. This is seen as being vital to Macau as the majority of its gambling visitors are residents of the Chinese mainland. Market analysts state they believe the discretionary spending cuts can be seen in the lowered sales of German luxury brand vehicles. These vehicle sales have slowed during the past three months and have generally been a reliable barometer on how much Chinese citizens are spending on pleasure.
If the world economy falls into a recession, Macau could see a revenue drop to 10%. Deutsche Bank commented on Macau and said, “We disagree with the consensus view that Macau is immune to a recession,”