Macau Extends Gaming Revenue Growth, Biggest Gain Since 2014

  • Revenue rises 14.4 percent, fourth straight month of gains
  • More visitors and casual gamblers lured to new resort casinos

The Chinese enclave of Macau extended gaming revenue gains in November, posting the strongest growth in almost three years and advancing a recovery that’s seen more visitors flock to the local resorts of Las Vegas Sands Corp. and Melco Crown Entertainment Ltd. in the world’s largest gambling hub.

Gross gaming revenue rose 14.4 percent to 18.8 billion patacas ($2.4 billion), according to Macau’s Gaming Inspection and Coordination Bureau. That compares with the median estimate for an 11 percent advance in a Bloomberg survey of nine analysts. It is the fourth straight month of gains and the strongest year-on-year growth since February 2014.

“Visitation is starting to grow again and more importantly, people are staying longer,” said Marcus Liu, a gaming analyst at CLSA Ltd, before the release. The strong growth is also due to a low base, as November 2015 posted the worst performance in five years, he said.

The $30 billion gaming industry in Macau, the only place in China where casinos are legal, has rebounded from a two-year slump as operators including Wynn Macau Ltd. opened new, billion-dollar resorts. Casino operators in the Chinese special administrative region have turned to attracting more families and casual gamblers amid President Xi Jinping’s efforts to curb official corruption and limit capital outflow that chased away high-stakes players who accounted for the bulk of bets.

Macau casino shares fell after the release in Hong Kong Thursday, as investors took profit after the Bloomberg Intelligence Macau Gaming Index reached its highest level in more than three months the previous day. Wynn Macau declined 4.2 percent while MGM China Holdings Ltd. fell 1.7 percent and Sands China Ltd. trimmed 0.5 percent Thursday.

Macau’s gaming industry was boosted as more visitors ventured to the city. Total visitor arrivals in Macau reached 2.7 million in October, with overnight visitors seeing year-on-year growth of 12 percent.

Lawrence Ho, Melco Crown’s chairman and chief executive officer, said the industry is experiencing a healthy rebound.

“We are in a recovery. That recovery is not going to be the same as the recovery during the global financial crisis,” Ho said in an interview Tuesday. “It’s going to be more of a natural recovery.”

Despite the positive signs of a rebound, the city’s government targeted a conservative forecast for gambling revenue next year, keeping it unchanged from 2016 at 200 billion patacas. That was 13 percent below analysts’ estimates. The government has pushed operators such as Las Vegas Sands and Galaxy Entertainment Group Ltd. to focus on tourists instead of the high rollers the industry’s relied upon in previous years.

Still, there are signs high-stakes players are returning to the tables. HSBC Holdings Plc. analyst Charlene Liu noted there is “genuine and sustained” VIP demand as rooms for those premium players re-opened for the first time in two years and the availability of credit increased. That comes as the Chinese government announced this week a 10 percent tax on luxury cars in a bid to combat conspicuous consumption and promote more fuel-efficient vehicles.

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