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Howard Stutz

Macau gaming revenue rises 7.3 percent, falls short of forecasts

4 February 2013

So much for the much-anticipated double-digit increase.

Macau casinos in January grew gaming revenues 7.3 percent, falling well short of Wall Street predictions that the Chinese gaming market would mirror December's single-month revenue record of $3.54 billion.

Macau's Gaming Inspection and Coordination Bureau said Friday that casinos collected $3.36 billion in revenues from gamblers. Still, the single-month figure is more than half of what casinos on the Strip collect in a year.

Union Gaming Group principal Grant Govertsen, who is based in Macau, told investors Chinese New Year fell in January during 2012. He also noted that customer foot traffic across town seemed to have slowed in the last part of the month.

Govertsen said January figures weren't discouraging and could suggest a strong February, which will be highlighted by Chinese New Year, which begins this week.

Macau gaming revenues grew 14 percent in 2012 to a record $38 billion.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said he believes Macau gaming revenues will grow between 11 percent and 13 percent this year, despite January's results.

Investors, he said, are more focused on the bullish results from Macau announced this week by Las Vegas Sands Corp. and Wynn Resorts Ltd.

"Although the results are somewhat disappointing, we expect investors to maintain their focus on recent Macau operator earnings reports, thus we see limited downside risk to today's announcement," Wiesczynski said.

Las Vegas Sands, Wynn and MGM Resorts International are each building multibillion resorts on Macau's Cotai Strip.