Macao's Sept gambling revenue up 'less than expected'

Updated: 2012-10-05 08:02

By Oswald Chen (HK Edition)

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 Macao's Sept gambling revenue up 'less than expected'

Rows of slot machines stand in the Sands Cotai Central casino resort in Macao. The city's gambling revenue rose slower than expected by 12.3 percent in September. Jerome Favre / Bloomberg

Gambling revenue in Macao rose a weaker-than-expected 12.3 percent in September, indicating that the slowing mainland economy is increasingly hurting the appetite of wealthy mainland gamblers who are not betting as much as they did previously at the world's largest casino market.

September's casino industry revenue reached 23.87 billion patacas ($2.99 billion) in September, Macao Gaming Inspection and Coordination Bureau announced on Thursday, representing the second weakest revenue figure this year.

Analysts had forecast Macao's September growth to reach between 15 and 17 percent annually, ahead of a national holiday week starting on October 1. In July and August this year, gambling revenue in Macao rose 1.5 percent and 5.5 percent respectively.

In the first nine months of 2012, Macao's gambling revenue amounted to 223.3 billion patacas, indicating that the cumulative increase had further narrowed to just an annual 14.9 percent hike.

September's weaker number was due in part to a slowdown in revenues in the last week, ahead of the long October holiday as the first three weeks were relatively strong, analysts said. They expected October data to show a bounce back.

"The prospect of the Macao-related gambling shares will be dim unless the mainland economy really can reverse its downward trend and the central government can really implement stimulating economic policies," Tengard Fund Management Investment Manager Patrick Shum told China Daily.

"The market will gauge the figure in October to determine whether the revenue slump trend will continue after the National Day holiday," Shum added.

The mainland economy's slowdown and increased political scrutiny due to an impending leadership reshuffle have taken their toll on the mainland's big-spending billionaire punters, pushing Macao's gambling revenue growth levels down substantially over the past five months.

Macao's economy, one of the world's fastest growing last year, relies heavily on the gambling industry. The sector contributes around 40 percent of the casino-crammed hub's gross domestic product.

Visitor levels have continued to trend downwards, adding to the competitive pressure amongst the six casino players operating in Macao, including Las Vegas stalwarts Steve Wynn, through his Wynn Macao unit, and MGM China.

Sands China, controlled by casino magnate and high-profile Republican donor Sheldon Adelson, opened a new resort in Macao, adding a new casino and a Sheraton hotel to Macao's expanding casino skyline.

Shares of Macao gambling companies were generally hit in Hong Kong on Thursday after the September data was released compared with a 0.1 percent gain on the main Hong Kong Hang Seng Index. Wynn Macao, MGM China, Sands China, Galaxy Entertainment and SJM Holdings all tumbled between 3.3 to 3.5 percent in Thursday's trading while Melco Crown rose 2 percent.

"There could be some profit-taking in the short term unless something positive happens on the policy side," Victor Yip, analyst at brokerage UOB Kay Hian in Hong Kong, said about the shares movements.

The former Portuguese colony, which is just an hour away from Hong Kong by ferry, is the only place where the Chinese can legally gamble at casinos in the country.

Reuters contributed to this story

oswald@chinadailyhk.com

(HK Edition 10/05/2012 page2)