International edition
September 21, 2021

This figure equates to what Las Vegas may record for half of 2011

Macau November gambling revenue up 33 % on year

(Macau).- Macau posted a 32.9 % rise in November gaming revenue to us$ 2.9 billion, government figures showed this week, buoyed by a rising tide of Chinese gamblers to the glitzy enclave, despite deep-set global economic uncertainties.


ovember revenue, which rose at the slowest pace this year, was expected to fall from October's record us$ 3.4 billion because of the previous month's week-long national holiday in China that dramatically increased the flow of visitors into Macau.

As investor fears grow over the robustness of the Chinese economy amid falling property prices and credit availability, the outlook for Macau's multi-billion-dollar gaming companies has darkened slightly over their exposure as a leveraged play on the world's second-largest economy.

Shares in casinos including U.S.-owned Sands China, Wynn Macau and MGM China Holdings have remained volatile, gaining sharply only after China cut reserve requirements for commercial lenders to help ease credit strains and shore up an economy running at its weakest pace since 2009. Wynn Macau rose 9.8 %, Sands China gained 7.8 % and MGM China rose 5.9 % on Thursday.

The former Portuguese colony, an hour from Hong Kong by ferry is the only place mainlanders can legally gamble in casinos, helping it rake in five times the revenue of rival Las Vegas.

The November figure, which equates to what Las Vegas may record for half of 2011, was no surprise, according to Credit Suisse consumer and gaming analyst Gabriel Chan. "Next month could be similar to this month in terms of growth, but going into January will be a low season as in the first couple of days of the Lunar New Year we don't have any VIPs coming to Macau," Chan said.

He added that the seven-day Chinese New Year holiday, which Chinese gamblers are more likely to spend with their families, would fall near the end of January next year, rather than in February when it is usually held, making year-on-year comparisons more tricky for that period.

VIP segment still strong

Despite concern that revenue from VIP gaming, which makes up more than 70 % of total gaming revenue, is declining, junket operators, casino executives and analysts have reported business as usual. "We are not seeing any changes in patterns in terms of velocity of money. Things have been pretty consistent for the last 12-18 months," Melco Crown International CFO Geoffrey Davis told reporters at a conference on Wednesday.

Analysts said growth in VIP gamblers was keeping pace with that of the fast-growing mass market, made up of China's middle class, with both growing about 30 % year on year.

Sands, controlled by U.S. billionaire Sheldon Adelson, added new VIP tables at its Four Seasons resort last week. The new tables and increased working capital being injected in the market may help boost December revenue, analysts said. The us$ 21 billion company is also set to unveil its newest property next to its gargantuan Venetian edifice early next year.

While Macau's gaming revenue easily trumps that of Las Vegas, the non-gaming component accounts for less than 5 percent of total revenue. In Las Vegas, earnings from shows, conventions and dining account for more than half of total revenue.

Macau government officials have increased calls for the need to develop Macau's gaming industry by stimulating growth in non-gaming areas such as conferences and exhibitions, hotels, retail, and food and beverage segments, pledging to support development in these areas.

Secretary of Economy and Finance Francis Tam reiterated that a cap on table games in casinos would allow an only 3 % annual growth on the number of tables starting from 2013, setting the stage for faster diversification.

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