RBS forecasts 28% year on year revenue growth for Macau in 2011
Wednesday, 04 May 2011
By Kate O'Keeffe
Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)--Gambling revenue in Macau rose 45% in April from a year earlier, government statistics issued Tuesday show, as mainland Chinese visitors to the territory helped revenue rise to a record high for the third month in a row.
Gambling revenue growth in Macau, the only place in China where casinos are legal, has been on a tear since the end of 2009 despite local government policies to slow the booming industry and encourage a more measured pace of growth. Macau overtook the Las Vegas Strip as the world's biggest gambling market in 2006 and last year raked in about four times the Strip's gambling revenue. Analysts expect Macau's gambling revenue to grow to five times the size of the Strip's this year.
Gambling revenue in Macau rose to MOP20.51 billion (US$2.56 billion) last month, up from MOP14.19 billion a year earlier, according to data from Macau's Gaming Inspection and Coordination Bureau. The total for April surpassed the previous monthly record of MOP20.09 billion, hit just a month earlier in March. Last month's growth follows blistering on-year increases of 48% in both February and March, and a 58% surge for the whole of last year.
RBS analyst Philip Tulk said: "The MOP20.5 billion reported for April will likely be seen as good but not great. While it represents another all-time record revenue month for Macau, we had seen estimates as high as MOP22.5 billion." He added the firm didn't plan to change its forecast for 28.5% on-year gambling revenue growth in 2011 as a result of the latest data.
U.S. casino companies Las Vegas Sands Corp. (LVS) and Wynn Resorts Ltd. (WYNN) have been benefiting from this frenetic pace of growth through their Macau units, as has MGM Resorts International (MGM), through a joint venture with a daughter of Macau kingpin Stanley Ho, as revenue in Las Vegas remains sluggish.
They compete against Ho's SJM Holdings Ltd. (0880.HK), the market's largest operator with about one third of the territory's gambling revenue; Melco Crown Entertainment Ltd. (MPEL), co-chaired by Ho's son Lawrence and
Australian James Packer; and Galaxy Entertainment Group Ltd. (0027.HK), controlled by the family of Hong Kong tycoon Lui Che Woo and primed to expand its presence by opening a nearly US$2 billion casino-resort May 15.
Union Gaming analyst Grant Govertsen called the record haul "no surprise" and noted that April had one additional weekend day compared to 2010, and that casinos benefited from an early start to the May 1 Labor Day holiday, which started April 30.