Gambling Revenues Still Robust in Macau

Gambling Revenues Still Robust in Macau

08 Oct 2011 | 11:17 Author: Seth Shafer

Macau continues to show no sign of its explosive growth slowing with gambling revenues in September coming in very strong.

Macau continues to show no sign of its explosive growth slowing with gambling revenues in September coming in very strong. A total of $2.6 billion in gambling revenues were generated in Macau in September, a whopping 39% increase over September 2010.

September revenues were off the record of $3.1 billion in August but the dip was expected due to various factors such as a national holiday and lost revenue from Typhoon Nesat, which prevented many would-be gamblers from traveling to Macau.

Despite the growth in gambling revenues it hasn't been all roses for the stocks of companies that operate casinos in Macau, which have seen very volatile trading in the last month including several daily swings of 20-30%.

Fearing a credit squeeze in China, some are predicting rougher waters for Macau casinos moving forward. Many rely on gambling junket operators to deliver a steady stream of high rollers to Macau's Baccarat tables and other games; gambling from high rollers is responsible for about 70% of the overall revenue in Macau's casinos.

Rumors that many junkets were reducing the credit offered to players caused a sharp sell-off in many Macau casino stocks, intensifying general selling pressure on gambling stocks around the world as economic uncertainty grows in Europe and other areas.

Most stocks saw a sharp rebound in the last week however, helped in part by upgrades for US casino stocks of Wynn Resorts and MGM International, which some analysts feel are well-positioned to continue to profit from their operations in Macau as well as around the world.

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