Macau’s casino gambling revenue jumped 40% to us$ 2 billion

“Macau gaming revenues will continue to be strong throughout 2010 from a year on year growth perspective, despite a modest cooling of the Chinese economy,” David Katz, an analyst at Jefferies & Co. in New York, said in a note to investors dated September 1. The August numbers were “relatively in line with expectations,” he said.

Macau surpassed the Las Vegas Strip as the world’s biggest gambling hub in 2006, after the government ended Stanley Ho’s four-decade gambling monopoly and allowed in foreign operators including Las Vegas Sands, Wynn Resorts and MGM Resorts International. The three Las Vegas-based casino companies compete in Macau with Ho’s SJM Holdings, Melco Crown Entertainment and Galaxy Entertainment Group, all based in Hong Kong.

Tourist arrivals in Macau increased 18 % in the first half, with visitor numbers from China surging 27 %, according to government data. Galaxy, part-owned by Permira Advisers, plans to invest an additional us$ 103 million to accelerate construction of a Macau casino resort to tap the gambling boom, Chairman Lui Che Woo said in Hong Kong August 31.

In the first eight months of 2010, revenues reached us$ 14.4 billion. If the growth rate remains unchanged, the sector will need less than one week of September to top the revenues registered in the whole last year, us$ 14.73 billion.

After a slight slump in June, the local gaming industry’s revenues had gone up again in July. In that month the casinos’ income reached us$ 1.99 billion, 19.6 % more than in June, and the sector’s second best monthly figure ever.

Analysts were expecting market growth “to resume” after the FIFA football World Cup, which finished on July 11. Hopes were even higher for August, “which is traditionally the summer travel season,” said the Deutsche Bank analyst Karen Tang a month ago. In fact, despite the deceleration, in August the industry recorded its third highest monthly revenue.

SJM said August 31 that first-half earnings before interest, taxes, depreciation and amortization rose 91 % to us$ 127.3 million. Its first-half net income rose more than fourfold to us$ 201.8 million, the company said.