International edition
June 13, 2021

Strong third-quarter earnings

Macau hits new gaming record to us$ 3.4 billion in October

(Macau).- Gambling revenue in Macau, broke a new record in October rising 42 % on the year to us$ 3.3 billion, with relentless demand from Chinese visitors continuing to defy concerns over the global economy and a domestic credit squeeze.

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idely expected to hit a new record because of China's Golden Week holiday, October revenue easily beat August's high of us$ 3 billion, according to government figures released on Tuesday.
 
Despite strong third-quarter earnings, shares of the multi-billion-dollar gaming companies operating in the enclave have been volatile, with investors wary of slowing growth next year.

Las Vegas Sands, Sands China, Wynn Resorts, Wynn Macau, MGM Resorts International, MGM China Holdings, Melco Crown Entertainment, Galaxy Entertainment and SJM Holdings, are the listed entities of the six licensed Macau operators.

Worries that a credit squeeze in China would impact Macau's lucrative junket industry has sapped sentiment over the last two months despite the junkets, facilitators who advance loans to wealthy Chinese gamblers and collect debts afterwards, saying it was business as normal.

Casino executives have said they do not expect growth to stay at 40-50 percent indefinitely, but that fundamentals of the lucrative industry remain solid because of factors including still untapped Chinese demand, an appreciating renminbi, and rising wages across the country.

On Tuesday, shares of the Hong Kong-listed gaming companies pared earlier losses on Tuesday after the results. The October revenue figure of us$ 3.4 billion is more than half of what Las Vegas is expected to make for the whole of 2011. "This may imply that the market has not shown any signs of slowing at all. It is a very good indication, said Victor Yip, analyst for UOB Kay Hian brokerage in Hong Kong.

Looking into the future

Infamous as a one-time hotbed for piracy and smuggling, Macau has pushed companies to expand their non-gaming amenities to attract more families and leisure tourists. The tiny enclave sees a monthly visitor inflows of close to 3 million. Yet Macau pales in comparison to Las Vegas in non-gaming revenue spending, with relatively few cash-rich mainlanders arriving with the intent of indulging in spas or watching shows.

Fitch Ratings said in a report released on October 28 that it had seen no evidence that tighter credit conditions and slowing growth in China were pressuring gaming demand in Macau. "Fitch continues to believe that the Macau market will grow solidly, albeit at a decelerating rate, moving into 2012. Fitch's 2012 base case forecast assumes that revenue will grow by 20 percent or more again next year," the agency said.

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