MACAO: Macao is expected to surpass Las Vegas to become the world's largest gaming city by revenue next year, a Barron's Magazine report said.

The article says that Macao's gaming industry racked up US$52.8 billion in 2004, compared with Las Vegas' US$53.3 billion. The small gap led some market heavyweights to say on record that Macao could dethrone Vegas as the world's top casino city in 2005.

Overall attendance and the number of new casinos that opened in the enclave this year were lower than expected, however. Total earnings grew by 13.7 per cent over the first three quarters, far below expectations of more than 20 per cent.

The report also cites several factors that could erode Macao's leading position in Asia's dice and chips business, including Singapore's decision to issue two gambling licences, one of which will soon be up for bidding. Thailand and Japan are considering similar moves.

The possibility of an avian flu outbreak could also hurt Macao's equally important tourism industry, as well as the gaming sector, the report says.

Barron's Magazine still expects Macao to eventually take top spot in the global gaming industry. The report cites positive factors such as the government's decision to grant gaming concessions to world-leading casino developers such as the US-based Sands and Wynn resorts.

These Vegas-style operators will help transform Macao from a mere gambling haven to a top vacation destination by indirectly attracting more patrons to the enclave's casinos.

Mainland gamblers have been the biggest contributors to Macao's casino industry, the report says. Over 66.66 per cent of Macao's gaming revenue comes from mainland tourists, although this accounts for less than 10 per cent of the earnings in Las Vegas casinos.

(HK Edition 12/23/2005 page3)