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Macau Casinos Surprise Analysts as Mass Gamblers Spur Growth

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Melco Resorts & Entertainment CEO Lawrence Ho discusses the gambling industry in the Asia-Pacific region.

Macau is beating analysts at their own game.

Casino revenue in the world’s largest gambling hub rocketed past even the most bullish expectations in April, soaring 28 percent from a year earlier. The result was even more impressive as analysts had already revised their forecasts higher in the preceding weeks.

MGM China Holdings Ltd. led gains in Macau casino operators. Its shares climbed as much as 6 percent to their highest intraday level since March 14 in Hong Kong. SJM Holdings Ltd. and Wynn Macau Ltd. gained more than 5 percent, while the benchmark Hang Seng Index declined 0.5 percent at 11:02 a.m.

Winning Wager

Macau gaming revenue consistently posted stronger growth than expected in last 2 years

Sources: Macau's Gaming Inspection & Coordination Bureau, Bloomberg

While high rollers continue to flock to the enclave, Macau is also seeing more robust business from casual gamblers. Gaming receipts from that so-called mass market grew 20 percent in the first quarter. Grant Govertsen, analyst at Union Gaming Securities Asia Ltd., says that pace accelerated in April and will continue well into May with tourists streaming into Macau for the holidays.

This cycle is different from 2013, when growth was led by high-stakes players, according to Lawrence Ho, Melco Resorts & Entertainment Ltd. chief executive officer. The industry has built new resorts to actively court the mass market that includes families and tourists, which bring in higher profit.

“This time around it’s both mass and VIP working side by side,” Ho said on Bloomberg TV. “Margin on mass is four times higher than VIP. The mass customers are more sophisticated and coming to a new city to experience the different aspects of it.”

(Updates with stock performance in third paragraph.)
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