Economy

Macao gambling revenue soars 58% in 2010

(Agencies)
Updated: 2011-01-04 10:12

An attendant stands outside an entrance to a casino of Wynn Macao Resort in Macao December 20, 2010, the day marking the 11th anniversary of the enclave's handover to Chinese rule from Portugal. [Photo/Agencies]

HONG KONG - Casino revenue in Macao soared 58 percent in 2010 to a record 188.34 billion patacas ($23.51 billion) year on year, bolstered by a flood of gamblers from the mainland on continued strength in the Chinese economy.

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December gambling revenue jumped 66.4 percent to a record monthly high of 18.883 billion patacas, the Macao Gaming Inspection and Coordination Bureau said on its website.

In recent years, the once sleepy southern Chinese city has metamorphosed into the world's largest gambling hub, with the latest numbers pushing it even further ahead of rival Las Vegas.

The stellar growth in revenue in 2010 contrasts with 10 percent growth in 2009, even without the relaxation of visa restrictions on Chinese mainland visitors and a recent reminder from China's premier Wen Jiabao for improved regulation and diversification of Macao's economy away from gambling.

Some analysts said discretionary spending by affluent Chinese would continue to power Macao's gambling sector -- the only place in China where casino gambling is legal -- to new heights in 2011 despite global economic storm clouds, although growth could moderate somewhat.

"The absolute level of the market is massive so it's hard to sustain that level of growth," said Aaron Fischer, CLSA's head of Asian gaming research, who expects Macao gambling revenue growth of 20 percent this year and 25 percent in 2012.

Janet Brashear of Bernstein research expects 17 percent market growth this year but noted in a recent report that limits on new gambling table capacity, a reluctance to approve new casino developments and possible tighter regulations on the junket operators that run lucrative VIP rooms, could eat into profits.

"There could easily be a 10 percent swing in either direction," Brashear wrote. "Government and economic variables abound however, which could alter the growth rate dramatically in either direction."

With a skyline already crammed with neon edifices, two new integrated casino resorts will be finished within 18 months on the Cotai strip, modelled as Asia's answer to Vegas' neon alley.

Macao's six casino operators include US giants Las Vegas Sands Corp via Sands China Ltd and Wynn Resorts Ltd through Wynn Macao Ltd, along with homegrown players Galaxy Entertainment Group Ltd and SJM Holdings Ltd, and joint ventures Melco Crown Entertainment Ltd and a casino jointly operated by MGM Mirage.

People walk past an entrance to a casino in Macau December 20, 2010, the day marking the 11th anniversary of the enclave's handover to Chinese rule from Portugal. [Photo/Agencies]