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Macau gaming revenues reach $40 billion in 2013

3 December 2013

With one month left in 2013, Macau’s casino industry already has blown away its 2012 record gaming revenue production.

In November, Macau casinos collected $3.8 billion from customers, which, when added to the figures from the previous 10 months, gives the market $40.9 billion in gaming revenues in 2013. A year ago, Macau collected a record $38 billion from customers.

The Macau Gaming Inspection and Coordination Bureau released the results Monday.

November’s number, a 21.3 percent increase, followed October’s single-month record of $4.6 billion in gaming revenues. The figure was the fourth-highest revenue month this year.

“The calendar comparison was favorable with one additional Saturday this year,” Union Gaming Group Principal Grant Govertsen, who is based in Macau, told investors. “There were no notable weather issues this month or in the prior-year period.”

On a year-to-date basis, Macau gaming revenues are up 18.6 percent over 2012.

Las Vegas Sands Corp., Wynn Resorts Ltd., and MGM Resorts International operate casinos in Macau. All three companies are developing new resorts on Macau’s the Cotai Strip.

Macau is home to 35 casinos. Eight properties are in development, including the resorts being built by the Nevada-based companies. The Beijing government wants Macau to increase its nongaming offerings to rely less on casino revenues.

Some of November’s 21.3 percent revenue jump was attributed to special events, including the championship fight between Manny Pacquiao and Brandon Rios in the 15,000-seat arena at The Venetian Macau, and the city’s annual Grand Prix auto race. Both events brought in high-spending visitors.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said Macau’s November numbers came in a little better than investors anticipated.

He said the market’s results over the next few years will be driven by infrastructure improvements that are expected to bring more visitors into Macau from mainland China. The $10 billion Hong Kong-Macau-Zhuhai Bridge is expected to open in 2016, replacing an hourlong ferry ride on the South China Sea with a 20-minute drive.

Macau’s casinos are expected to benefit from a new light rail system that will decrease travel times to and from China’s northern cities. Also, Macau’s ferry terminals and the city’s international airport are being expanded.

“As ongoing infrastructure projects designed to ease travel to Macau and further penetrate large mainland population centers come to fruition, we believe Las Vegas Sands should be able to capture a disproportionate share of these incremental trips,” Wieczynski said.

Analysts expect similar numbers in December, although the percentage increase may be in the single-digits.

“Investors and (Wall) Street have low expectations for December gaming revenues as strong (high-end) volumes and high hold drove 20 percent year-over-year growth in December 2012,” Wells Fargo Securities gaming analyst Cameron McKnight said.