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MACAU -- Asian gaming analysts said Tuesday Macau's gambling win of $6.95 billion during 2006 means the Chinese enclave as surpassed the Strip as the world's largest gaming market.
But Las Vegas casino operators with an expanding presence in Macau don't believe the community's gaming revenue has exceeded the Strip's -- yet. Chinese gambling authorities account for a portion of the wagering business differently than it is done in Nevada, they said.
"It's not an apples to apples comparison," said Wynn Resorts Ltd. Chairman Steve Wynn, whose company opened the $1.2 billion Wynn Macau in September. "It may be the only jurisdiction where customer promotional allowances are not deducted before the revenue is counted.
"That said, there is no question by next year, Macau's real numbers will be bigger than Las Vegas. As a community, Macau is the most dramatically changing place on the planet. I haven't seen anything like this in 40 years."
Las Vegas Sands Corp. President Bill Weidner, whose company expanded its 2-year-old Sands Macau last summer and is planning to open the $2.4 billion Venetian Macau later this year, said the market in China will continue to grow. It's only a matter of time, he said, before the Chinese casino industry laps its Las Vegas counterparts.
"Macau has the potential to attract 10 times the number of people as Las Vegas," Weidner said. "The growth numbers are strong in Macau, and it's expanding so rapidly, there is no question it will surpass Las Vegas."
The 27 casinos in the Chinese city won more than $6.95 billion from gamblers in 2006, a 22 percent increase over the gaming revenue from 2005, the Macau Gaming Inspection and Coordination Bureau reported. The city also attracted 22 million visitors last year, an increase of 17 percent, the director of the Macau tourism office said.
Wynn said Macau's gaming win figure was "artificially inflated" because the region counts the revenue from a redeemable chip purchase program used by high-rolling Chinese gamblers. Those promotional costs could account for up to 25 percent of Macau's gaming revenue, he said.
"It's a very different way of calculating the gaming win, but I'm not saying it's wrong by any means," Wynn said.
The Gaming Control Board won't report the state's gaming win for December and all of 2006 until next month. However, on the Strip through November, 40 casinos had won $6.07 billion from customers. Even if Strip casinos in December match their all-time monthly gaming win, $642.4 million reported in November, the 12-month total wouldn't surpass Macau's 2006 figure. Gaming analysts have predicted Strip casinos will win between $6.5 billion and $6.6 billion in 2006.
Macau's gaming revenue may reach $8 billion this year, driven primarily by the scheduled opening of the Venetian Macau this summer, said Jonathan Galaviz, a partner at Globalysis Ltd. in Las Vegas.
"Macau's calculation of gross casino gaming revenue is generally similar to the method of calculation made by the state of Nevada, but there are some unique differences which can occasionally impact the ability to make a direct comparison between the two markets," Galaviz said. "All in all, the upward trajectory of gross gaming revenue in Macau places it as one of the world's fastest growing leisure tourism markets."
American-based gaming analysts said the Strip's gaming win doesn't take into account casinos in Henderson, North Las Vegas, downtown and unincorporated areas of Clark County. Through November, Clark County casinos as a whole reported gaming revenue of more than $9.7 billion.
The annual gaming revenue from American Indian casinos has long since surpassed casino win on the Strip and Nevada. In 2004, Indian casinos earned $19.4 billion nationwide, well above the $10.6 billion won by Nevada casinos that year. Indian casinos in California collected $5.3 billion that year, equaling the win of Strip resorts.
In another comparison, Las Vegas tourism officials expect Southern Nevada to attract 38.7 million people this year.
"Macau is growing at a much more rapid pace than the Las Vegas Strip," said Rob Hart, a Hong Kong-based gaming and property market strategist for Morgan Stanley. "They've got a lot of new casinos opening this year."
Macau, however, is growing at an accelerated rate. In total, 2.2 billion people live within five hours flying time of Macau, reports CLSA Asia-Pacific Markets, compared with 410 million in the same radius of Las Vegas.
Seven new casinos, led by Wynn Macau, opened in the Chinese city in 2006. The number of gaming tables doubled in the period to 2,762, Macau casino regulators report. Wynn said he'll have more than 500 gaming tables and 1,300 slot machines at his property by July.
Meanwhile, Sands Macau, the city's first American-owned casino, expanded its gaming floor to 229,000 square feet, growing to accommodate 740 gaming tables and 1,254 slot machines.
The Venetian Macau on the Cotai Strip is expected to open with 850 table games and 4,100 slot machines. It is designed to have a final capacity of approximately 1,150 table games and 7,000 slot machines.
On the Cotai Strip, the company's seven casinos are expected to house approximately 2,900 table games and 16,000 slot machines.
MGM Mirage is also building the $1 billion MGM Grand Macau, which could open by the end of the year.
Weidner said Macau will also experience another phenomenon over the years similar to Las Vegas; nongaming revenue is expected to increase dramatically as restaurant offerings and increased retail options open and convention business finds its way to the Asian market.
In Nevada over the last fiscal year, $12 billion, more the 50 percent of the state's total revenue from casinos, came from nongaming sources such as hotel rooms, entertainment, retail, food and beverage.
"That's going to be one of the huge areas of growth in Macau, especially when you look at the fundamentals and the demographics of the market," Weidner said. "Gaming analysts are expecting gaming revenues to be $12 billion or $13 billion by 2010. But certainly, noncasino revenues are going to experience double digit growth as well."
Bloomberg News contributed to this report.
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