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Macau casino revenues top $3 billion in August2 September 2011
The Chinese special administrative region's 34 casinos shattered single-month gaming revenue figures in August, collecting $3.09 billion from gamblers during the month. The figure was a 57 percent increase over August 2010 and 2 percent higher than July.
Analysts said the monthly year-over-year comparisons continue to reflect the May opening of Galaxy Cotai, along with growth in high-end business.
The results also halted any worries that a softening in the world's economy or attempts by the mainland Chinese government to slow wagering will keep gamblers away. Policy changes originating in Beijing, primarily monetary policy tightening and restrictions on visitation to Macau, pose the greatest threat to future growth.
"As we have indicated in the past, we do not expect ongoing macroeconomic turmoil in the U.S. or Europe to have a material impact on Asian gaming volumes, a view further supported by strong August results," Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski told investors.
Macau's Gaming Inspection and Coordination Bureau reported Thursday that casinos collected 24.8 billion patacas, which translated into $3.09 billion in U.S. dollars. The figure topped the 24.3 billion patacas collected by casinos in May.
"We believe strong industry fundamentals have demonstrated the sector's resilience and allayed the market's concerns about slowing revenue growth," JP Morgan gaming analyst Joe Greff told investors.
Macau overtook the Strip as the world's biggest gambling market in 2006. Last year, the region's casinos brought in $23.5 billion. Analysts estimate that Macau could bring in five times the Strip's gambling revenue this year. Through August, Macau's casino revenues grew 47 percent from the first eight months of 2010.
Casinos operated by SJM, the Hong Kong company controlled by billionaire Stanley Ho, collected 27.5 percent of all the gaming revenues in the market. The opening of the Galaxy Macau on the Cotai Strip boosted the market share for Hong Kong-based Galaxy Entertainment, which operates the resort. Galaxy had 14.5 percent of the market while Australia-based Melco-PBL, which operates Casino City of Dreams and the Crown Macau, had about 14 percent.
Three Nevada gaming companies, Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International, operate casinos in the Macau region.
"Macau appears to have absorbed the new supply on Cotai," Susquehanna Financial Group gaming analyst Rachael Rothman told investors. "We are raising our marketwide estimates to reflect August's bullish data point."
Las Vegas Sands, which operates The Venetian Macao Resort-Hotel and Sands Macao, plans to add 5,800 hotel rooms and 300,000 square feet of casino space next year as part of the multiresort development on the Cotai Strip.
"Las Vegas Sands, given its properties' appeal to Asian mass-market gamblers and proven integrated resort model, remains well-positioned to directly benefit from increased visitation to Macau, particularly to the Cotai Strip," Wieczynski said.
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