Macau hits new gaming record in Oct to $3.4 billion

Tue Nov 1, 2011 5:24am EDT
 
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By Farah Master

HONG KONG (Reuters) - Gambling revenue in glitzy Macau, the world's largest gaming destination, broke a new record in October rising 42 percent on the year to 26.9 billion patacas ($3.4 billion), with relentless demand from Chinese visitors continuing to defy concerns over the global economy and a domestic credit squeeze.

Widely expected to hit a new record because of China's Golden Week holiday, October revenue easily beat August's high of 24.8 billion patacas, according to government figures released on Tuesday.

The former Portuguese colony, an hour from Hong Kong by ferry, is the only place in China in which casino gambling is legal, helping revenue there exceed that of neon rival Las Vegas fivefold.

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 Corp, Sands China Ltd, Wynn Resorts Ltd, Wynn Macau Ltd, MGM Resorts International, MGM China Holdings Ltd, Melco Crown Entertainment Ltd, Galaxy Entertainment Group Ltd and SJM Holdings Ltd, 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, outperforming the benchmark Hang Seng Index's 2.49 percent decline.   Continued...