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Howard Stutz

Macau casino revenue continues growth

2 February 2011

MACAU -- Gaming revenues produced at Macau's more than three dozen casinos grew 33 percent in January, with the Chinese gambling market showing no signs of slowing down after a banner 2010.

The results, $2.32 billion, or a 32.9 percent increase compared with January 2010, came in behind a 52 percent year-over-year increase in December. But the figures don't include results for the 15-day Chinese New Year celebration, which begins Thursday.

In 2010, Macau's casinos collected $23.4 billion in gaming revenues, a 58 percent increase over 2009.

Las Vegas Sands Corp., which operates three resorts in Macau and is building four additional resorts along the Cotai Strip region, had about 18 percent of the marketshare, according Macau government regulators.

The casinos controlled by Hong Kong billionaire Stanley Ho's company had 31 percent of the market.

"The result was a slight disappointment given January had been trending towards another record monthly haul early on," Susquehanna International Group gaming analyst Rachael Rothman told investors. "However, Macau gaming revenue growth remains ahead of our full year growth estimate."

Several analysts were surprised by the strength January's results because Chinese New Year is on the horizon. The January results reflected the third highest gross gaming revenue month ever in Macau.

Since October, monthly gaming revenues in Macau have surpassed $2.3 billion in three of the past four months.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said the revenue numbers could give investors additional interest in Las Vegas Sands, as well as Wynn Resorts Ltd. and MGM Resorts International, which also operate casinos in Macau,

"We expect shares of Macau operators to trade higher as investors react to today's results," Wieczynski said.

Even with Macau's record revenue haul in 2010 and the potential of a slowing economy in China, analysts believe the market will continue to flourish.

"The results are consistent with our view that the revenue trends in Macau should remain robust even with tougher comparisons in the first half of 2011," said Jefferies & Co. gaming analyst David Katz.
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