Macau casinos' revenue climbs to HK$290b in 2012
Growth attributed to a surging mass-market customer base and long-awaited rise in VIP play
Macau's casino industry put in a stronger-than-expected performance in December, ending the year with record gross gaming revenue both in annual and monthly terms.
Casino revenue in the world's largest gaming hub rose 19.6 per cent year on year last month to an all-time high of 28.2 billion patacas, according to data released by the Gaming Inspection and Co-ordination Bureau. It trumped the former record set in October of 27.7 billion patacas.
For the full year of 2012, the casino industry recorded gross gaming revenue of 304.1 billion patacas, up 13.5 per cent from the previous year. Despite being a record, the annual growth rate has slowed from the 42.2 per cent of 2011.
"I think 13.5 per cent full-year 2012 growth is very impressive when taken in the context of a continued global economic slowdown," said Grant Govertsen, lead analyst at Macau-based Union Gaming Research.
He said robust growth last month was indicative of two things: a surging mass-market customer base and a long-awaited uptick in high-stakes VIP play. Last year the higher spending of the mainland's middle class played an important role in offsetting a weak growth in the VIP sector.
Chelsey Tam, an analyst at Emperor Securities, said consumer confidence lifted as China's economy showed signs of improvement. "The Christmas promotions offered by the casinos certainly also contributed to the robust growth," she said.
Visitor arrivals in Macau rose 0.5 per cent to 25.6 million in the first 11 months last year, with 60 per cent coming from the mainland.
Tam expected the revenue growth rate this year to slow down "to high, single-digit [growth] as a result of the high base effect", or inflation in the previous year.
However, Govertsen forecast 2013 growth to exceed last year's. "We are expecting an uptick in VIP play, as compared to flat VIP growth in 2012. On the heels of lots of significant infrastructure projects, we think the mass market will continue to grow at 25 per cent or better," he said.
Analysts are watching to see if the central government will adopt tighter measures to curb money transfers and corruption, which may affect gaming. Govertsen said he did not think any of the anti-corruption measures were targeted at Macau.
Shares of Sands China, rose 5.2 per cent to HK$35.75 in the first trading day this year, the highest since its 2009 debut. Galaxy Entertainment went up 3.1 per cent to HK$31.3, the highest price since at least October 1991, according to data compiled by Bloomberg.