Macau gambling revenues surge 48pc in 'quiet' month of March

PUBLISHED : Saturday, 02 April, 2011, 12:00am
UPDATED : Saturday, 02 April, 2011, 12:00am


Macau casino revenue broke through 20 billion patacas for the first time last month as gambling volumes in the city continue to gather momentum.

The new mark represented a record for the second consecutive month, soaring 48 per cent from a year ago to 20.09 billion patacas and surpassing February's 19.86 billion patacas, data released yesterday by the Macao Gaming Inspection and Co-ordination Bureau show.

In the first three months of the year, Macau's casinos have recorded 58.52 billion patacas in revenue, a 43 per cent increase from the same period a year ago. That puts Macau on track to add revenue equivalent to one Las Vegas Strip this year.

'Clearly no negative impact was felt as a result of the events in Japan during the month,' Union Gaming Group analyst Bill Lerner wrote yesterday in a research note.

Lerner forecast Macau's full-year casino revenue would grow 25-30 per cent this year to as much as 245 billion patacas, or slightly more than US$30 billion.

That would be on par with 2009 gaming revenues from all commercial casinos in the United States, according to American Gaming Association figures.

Last year, the Las Vegas Strip booked US$5.78 billion in casino revenue while the state of Nevada recorded US$10.4 billion, according to data from the Nevada Gaming Control Board.

Macau's March windfall is all the more remarkable given that it came during a seasonally soft month.

Casinos typically take a breather in March and April between the twin 'golden week' holidays of Lunar New Year (which occurred in February this year) and May Day.

The growth continues to be driven by surging high-stakes gambling volumes as high rollers from the mainland with abundant credit test their luck on the baccarat tables.

In the first two months of the year, casino revenue rose 40 per cent to 38.43 billion patacas. However, visitor arrivals to Macau grew by only 3.3 per cent to 4.24 million people, while arrivals of mainland visitors increased only 6.5 per cent to 2.42 million.

Macau's casino revenues have continued to boom despite efforts by the local government to rein-in development of the sector, including restrictions on the number of gaming tables that can operate in the city and limiting the number of foreign construction and other workers that gaming firms can import.

The growth has boosted shares in most Macau casino operators to double-digit gains in the year to date. Success is already priced into the shares in most cases. The sector trades at 16 to 62 times this year's forecast earnings, compared with 12.8 times for the Hang Seng Index.

Only one new casino is set to open in Macau this year, the HK$15.5 billion, 2,260-room Galaxy Macau on the Cotai strip.

The property is set to open on May 15 with 450 gaming tables and 7,600 staff. It features a 1,500-room Galaxy-branded hotel (700 rooms will be ready on opening day), a 260-room Banyan Tree hotel, and a 500-room Hotel Okura.