Macau's August Casino Revenue Surges 40% to $2 Billion on New VIP Tables

Casino revenue in Macau, the world’s biggest gambling hub, rose 40 percent to 15.8 billion patacas ($2 billion) in August after SJM Holdings Ltd. and its rivals added tables for high-stakes bettors.

Revenue for the six casino operators in the former Portuguese colony surged 63 percent from a year earlier to 117.9 billion patacas in the eight months through August, according to Macau’s Gaming Inspection and Coordination Bureau.

The revenue growth in August is the slowest this year and in line with a forecast made by CLSA Ltd. analyst Aaron Fischer. Wynn Macau Ltd., Galaxy Entertainment Group Ltd. and other casino operators have increased revenue from so-called VIP gamblers after boosting the number of baccarat tables with minimum bets of 10,000 patacas or higher.

“A slight moderation in the growth momentum of Macau’s gross casino revenue would probably be a healthy thing at this point,” independent industry consultant Jonathan Galaviz said late yesterday. “A significant real-estate market downturn is likely in China, and its ultimate effect on Macau would be pronounced.”

SJM, which has the greatest market share in the only Chinese city where casinos are legal, said revenue from VIP gamblers more than doubled in the first half. Wynn Macau, the Hong Kong-listed unit of Wynn Resorts Inc., said revenue from high rollers rose 80 percent in the same period.

‘Robust’ Revenue Trend

Sands China Ltd., the Hong Kong-listed unit of billionaire Sheldon Adelson’s Las Vegas-based company, climbed 3.2 percent to close at HK$12.42, the highest level in more than two months. Melco International Development Ltd., which has a venture with Australian billionaire James Packer’s Crown Ltd., gained 2 percent to HK$3.10 at the 4 p.m. close of trading in Hong Kong.

The pace of revenue growth “may still disappoint the market on the back of some aggressive forecasts that came out recently,” Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG said in a note to clients today.

Las Vegas Sands Corp. Chairman Sheldon Adelson in June predicted Macau casino sales will grow more than 30 percent in the second half. Gambling revenue for the city’s casino operators surged 67 percent in the six months through June.

Chan said 30 percent growth in the second half may be “difficult to achieve.”

Sands, Wynn

Las Vegas Sands gained 3.7 percent to $29.39 on the New York Stock Exchange yesterday, boosting its climb this year to 97 percent. Wynn Resorts climbed 2.4 percent to $82.57, Melco Crown Entertainment Ltd. rose 0.3 percent to $3.91. MGM Resorts International, which has a Macau venture with Stanley Ho’s daughter Pansy Ho, advanced 2.7 percent to $9.25.

SJM fell 0.8 percent to HK$7.37 in Hong Kong today, Galaxy retreated 0.3 percent to HK$5.86 and Wynn Macau declined 0.1 percent to HK$13.5.

Macau surpassed the Las Vegas Strip as the world’s biggest gambling hub in 2006, after the government ended Stanley Ho’s four-decade gambling monopoly and allowed foreign operators including Las Vegas Sands Corp., Wynn Resorts Inc. and MGM Resorts International. The three Las Vegas-based casino companies compete in Macau with Ho’s SJM, Melco Crown and Galaxy Entertainment Group Ltd., all based in Hong Kong. Galaxy fell 0.3 percent to HK$5.86.

Tourist arrivals in Macau increased 18 percent in the first half, with visitor numbers from China surging 27 percent, according to government data.

Galaxy, part-owned by Permira Advisers LLP, plans to invest an additional HK$800 million ($103 million) to accelerate construction of a Macau casino resort to tap the gambling boom, Chairman Lui Che Woo said in Hong Kong Aug. 31.

The company also said Aug. 31 that first-half earnings before interest, taxes, depreciation and amortization rose 91 percent to HK$990 million. SJM’s first-half net income rose more than fourfold to HK$1.57 billion, the company said Aug. 30.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Wendy Leung in Hong Kong at wleung12@bloomberg.net

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