Macau reports September casino revenue up 21.4%

September's revenue came in at us$ 3.63 billion according to government data released on Thursday. The figure was at the low end of analyst estimates who forecasted September growth in the world's biggest gambling market to rise 22-25 %.

Located on China's southern coast, Macau's gambling revenues are highly dependent on the domestic market with more than two-thirds of tourists coming from the mainland. Macau is the only place in China where casino gambling is legal.

On September 22 a severe typhoon hit close to Macau and Hong Kong, disrupting air, road and rail links in the surrounding areas and resulting in a lower influx of visitors into the casino hub. 

Looking ahead, October is expected to be a bumper month for gambling revenues with analysts expecting a new monthly record due to the week-long national holiday at the start of the month. Hotels are nearly fully booked for the period. The government is actively trying to increase the number of visitors to Macau from 28 million last year with the aim to transform the former Portuguese colony into an international tourism destination.

However, Macau residents and casino executives say the tiny territory still has acute challenges in facilitating large numbers of tourists.

Long delays and rising costs for local infrastructure developments like a new ferry terminal and an elevated railway are ongoing and have no fixed timetable for opening. During periods of heavy rain, Macau's downtown and outer areas are affected by floods and sometimes landslides.

To help ease the visitor flows, Macau's government last month introduced 'walking routes' to divert traffic from the downtown city centre that houses 23 of Macau's 35 casinos.

Analysts are confident that as external infrastructure projects are completed, such as the expansion of an intercity railway in China and a bridge connecting Hong Kong, Zhuhai and Macau that is due to open in 2016, greater numbers of visitors will be able to visit Macau.

Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings, Melco Crown Entertainment, the six licensed operators, are all rapidly building casinos on Macau's Las Vegas style Cotai strip, resulting in an increase of close to 13,000 hotel rooms in Macau by 2017.

Aaron Fischer, an analyst at CLSA in Hong Kong, says a rise in tourist arrivals to fill the rooms is achievable. "Visitor growth in Macau historically has underperformed that of Hong Kong due to the infrastructure bottleneck and the lack of hotel rooms. Those constraints are likely to be alleviated in the next few years with the various infrastructure improvements, which should drive a recovery in Macau's tourist arrival growth."

In the short term increasing gridlock on Macau's streets remains a sore point among residents. At the Taipa ferry terminal on a Tuesday morning, swarms of tourists were packed together at the arrivals exit. Casino tour buses jammed together in a long queue to take eager gamblers to the resorts and the road completely blocked by incoming tour buses.

"They keep building the casinos, I don't know how people will be able to get around," said Wang a Macau taxi driver, who only gave his last name, after being stuck in traffic behind a large tourist bus.