Macau Casinos Extend Winning Streak as Junkets Lure GamblersBy
Revenue growth in November exceeds analyst estimates
Gaming receipts increased 23%, fastest pace in 4 months
Macau’s casino revenue in November grew at the fastest pace in four months as junket operators attracted high-stakes players to the world’s largest gambling hub.
Gross gaming receipts rose 23 percent to 23 billion patacas ($2.9 billion) last month, according to data released by Macau’s Gaming Inspection and Coordination Bureau on Friday. That exceeds the median estimate for a 19 percent increase in a Bloomberg survey of seven analysts.
The casino industry in the former Portuguese colony is being spurred by wealthy Chinese returning to the gaming center after China’s anti-corruption drive triggered a slowdown. Revenue from high-stakes gamblers has grown more than 28 percent in the first nine months of this year, outpacing the mass-market segment of casual gamblers. Macau’s biggest junket operator, Suncity Group, reported it’s seeing a surge in VIP business, aided by a luxury rewards program.
MGM China Holdings Ltd. jumped to a three-year high at the close in Hong Kong and Galaxy Entertainment Group Ltd. climbed 2.2 percent. The Bloomberg Intelligence index of Macau casino stocks rose 1.9 percent, while the Hang Seng Index declined 0.4 percent.
Revenue climbed 20 percent in the 11 months through November. The recovery in Macau will be supported through 2018 by the resurgence of both high rollers and the slightly lower tier of big-spending casual gamblers from China, Bloomberg Intelligence analysts Margaret Huang and Carmen Lee wrote in a note this week. Casinos are opening new resorts or renovating properties to include high-end amenities to woo high-spending gamblers directly or through junket operators, they said.
Las Vegas Sands Corp. is set to spend $1.1 billion to renovate a Cotai resort into a London-themed attraction while MGM China’s Cotai resort will begin VIP operations in the first half of next year and has secured five junket operators to bring high-stakes players.
Still, as the casino business is booming, Macau regulators are strengthening their oversight of the almost $30 billion industry. The local government said it’s currently reviewing its gaming laws to ensure casinos are following through on non-gaming commitments. Beginning in January, it also plans to tighten standards for licensing junket operators.