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Macau gaming revenues rise 21.1 percent in June

2 July 2013

Macau gaming revenue grew 21.1 percent in June, as the world’s largest casino market continues to benefit from a nonstop supply of middle-class Chinese gamblers eager to place their bets in the former Portuguese colony.

Gambling revenue in the Chinese territory, just across the strait from Hong Kong, rose to $3.54 billion, according to figures released Monday by the Macau Gaming Inspection and Coordination Bureau. Analysts had forecast June growth to be up 18 percent to 22 percent.

Macau is the only place in China where people can legally gamble at casinos.

In May, revenues grew 13.5 percent to $3.7 billion, the second-largest single month collection ever recorded in Macau. The Chinese gambling enclave broke its monthly gaming revenue mark in March when casinos collected $3.92 billion.

Harry Curtis, an analyst with Nomura Equity Research, attributed the monthly numbers to a “stronger-than-expected final week” of June, as the “mass market headcount remains strong.”

There are two types of gamblers in Macau — mass market, which are mainly middle-class workers from China and elsewhere in Asia, and VIP or so-called high rollers.

Curtis estimated that July gaming revenues could jump 19 percent to 21 percent.

“We are not changing our full year estimate of plus 15 percent despite the recent stronger-than-expected numbers because of tight credit conditions in China,” he said. “So far, gamers in Macau have ignored the dire economic press.”

Union Gaming Research Macau analyst Grant Govertsen said that on a year-to-date basis, Macau’s gambling revenues are up 15.3 percent, just below the firm’s 2013 forecast of 16 percent.

“Despite certain reports to the contrary, we believe Macau fundamentals remain strong across all relevant segments, and we have strong conviction that these trends are likely to continue through the balance of the year,” Govertsen said.

Through June, gaming revenues are up 15.3 percent over the same six-month period in 2012. Last year, Macau reported gaming revenues of $38 billion.

By comparison, gaming revenues in Nevada were $10.8 billion last year. Casinos on the Strip generated $6.2 billion last year.

Wynn Resorts Ltd., Las Vegas Sands Corp. and MGM Resorts International operate hotel-casinos in the Macau market. All the companies are expanding their presence in the region, with MGM Resorts’ $2.5 billion development on the Cotai Strip due in 2016. The 1,600-room hotel and casino will be a sister resort to the 600-room MGM Grand Macau.

Wynn Resorts’ $3.5 billion hotel-casino also is likely to open in 2016. Las Vegas Sands is finishing another phase of the $4.4 billion Sands Cotai Central and is developing a Paris-themed hotel-casino project.