BestCraps.com

Macau Gambling Revenue Surged 40% in August

Posted on September 8th, 2010

With Macau recently regarded as Asia’s Las Vegas it is not surprising that the region posted a huge increase in gambling revenue just last month. Compared to last year’s figures, this year’s August Gambling Revenue is pegged to be 40% higher. That is literally a more than 4 billion patacas increase from the previous year. Despite the month’s huge figures though, it still ranks third in total gambling revenue for this year trailing behind May and July. The figures, are expected to lower in the following months as the momentum is expected to die down. Furthermore, analysts believe that September will see a decrease in gambling revenue as it could be taken as an “off-peak” season. “We think September could be softer given that visitors tend to delay their travel plans ahead of the Golden Week holidays in October,” Karen Tang, an analyst for the Deutsche Bank wrote. Nevertheless, analysts and experts in the field still take this as a clear sign of recovery.

The past year has been one of the worst for casinos in Macau. Battered by numerous reasons like the outbreak of the swine flu, visa restrictions from China, and the massive economic slump, casinos have reported all-time lows. That is why news of a very considerable increase in gambling revenue is most welcome by the many casino operators in Macau. The pack of casino license-holders in Macau is led by SJM holdings with a market share of 29%, closely followed by Sands China with a market share of 20%. These two have recently been engaged in a land dispute involving pieces of land in Cotai. Analysts believe that this is testament to the recovery of the gambling industry in Macau.

2009 has been so bad for the gambling industry in China that the month with the highest revenue garnered this year, July, posted a 70% increase compared to last year’s figures. That’s almost twice as much as last year’s July with a not-so-staggering amount of 16.3 billion patacas. Experts believe that in a good year, gambling revenue would easily go over that number emphasizing the fact that for that amount to be a 70% increase from last year’s posted revenue is proof of the hardship suffered by the casinos in Macau in 2009. With the heavy increase in figures, and despite revenues projected to slow down during the coming months, everyone believes Macau is getting back on track.

The same, however, cannot be said for casinos in Atlantic City and Las Vegas, both of which having posted very low revenues for the summer. Atlantic City is undergoing a massive restructuring to keep things running smoothly, every industry considered. The economic slump had massive effects on Las Vegas and Atlantic City as these two have been dependent on casinos and tourism. Coupled with the fact that most States have been expanding local gambling and casinos adding to the competition, experts believe that Macau, will be enjoying recovery for a considerable amount of time before these two get back on track.

Macau stocks have finished strongly and those who did lose, posted only a very small loss. Of the six casino operators in Macau, three posted gains with Sands China leading the crew with a posted increase of 3.2%, followed by Melco International with 2% and Hang Seng bringing up the rear with 1.2%. SJM, who had the biggest market share of the gambling industry, dropped 0.8% while Galaxy and Wynn only posted a loss of .3% and .2% respectively. For an industry that has been literally crawling through last year, the posted revenue and stock values of the license holders is remarkably stable. With this surge in revenue, Macau is expecting renewed investments flowing in. While current casino operators battle among themselves for a share of the revitalized market, analysts look eagerly towards next year as numerous plans, including Sands China’s 2 ongoing projects, which were delayed by labor shortages, will be completed thus renewing again Macau’s days of plenty.