Macao June casino revenues see 20% m-o-m decline
Updated: 2010-07-03 07:45
(HK Edition)
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Macao's casino revenue declined 20 percent in June from the previous month as the World Cup kept some gamblers away from card games and slot machines in the world's biggest betting hub.
Gaming revenue for casinos in the city fell to 13.6 billion patacas ($1.69 billion) in June from 17.1 billion patacas in May, according to Macao's Gaming Inspection and Coordination Bureau.
The city's gaming industry will continue to be hurt by "temporary softness in VIP betting as the World Cup approaches its final stages," Deutsche Bank AG analyst Karen Tang said in a note to clients. "We expect market growth to resume sequentially in August, which is traditionally the summer travel season."
Police in Hong Kong, an hour's ferry ride from Macao, have set up a task force to crack down on illegal football betting during the World Cup, the Standard newspaper reported in May. Authorities have seized HK$170 million ($22 million) in records of illegal bets on football in two locations, the South China Morning Post reported June 28. The World Cup's final game this year is on July 11.
The mainland's economic growth, coupled with a lending boom, has fuelled a boom in revenue for casinos in the only place in the country where they are legal. Junket operators, who bring high rollers to Macao and lend them money, have benefited from a "sudden increase" in credit, Deutsche Bank's Tang said in a June 11 report.
CLSA Ltd's Macao Gaming Index had outperformed Hong Kong's benchmark Hang Seng Index by 40 percent this year as of June 25, according to a note to clients from analyst Aaron Fischer.
SJM had 30.3 percent of Macao's casino gambling market, followed by Sands China at 21 percent, according to estimates by CLSA's Fischer. Wynn ranked third with 17 percent and Melco Crown had 13.5 percent.
MGM Mirage's venture with Pansy Ho had 7.5 percent, said Fischer, who added that gambling growth in Macao was hurt by the World Cup.
Macao casino gambling revenues surged 57 percent in the first quarter to about 41 billion patacas as the mainland's economic growth accelerated to 11.9 percent, the fastest pace in almost three years.
Last month's number, which is 65 percent higher than June last year's, means second-quarter revenue for casinos in the former Portuguese colony increased 77 percent to 44.9 billion patacas, according to Bloomberg calculations using data on the gaming regulator's website. The total for the first half rose 67 percent to 85.9 billion patacas.
Revenue growth from high rollers placing wagers at baccarat tables where the lowest bet per hand is 10,000 patacas was about 124 percent in May compared with 58 percent for "mass-market" bettors, Deutsche Bank's Tang said in a separate note. The bets at Macao's "VIP tables" can go up to as much as 2 million patacas a hand.
VIP gamblers contribute about 70 percent of Macao's gaming revenue, CLSA analysts Fischer and Huei Suen Ng estimated.
At Galaxy's flagship casino StarWorld, high-limit tables account for 85 percent of revenue, according to Chief Financial Officer Robert Drake.
Macao's casinos had a record 119 billion patacas in revenue last year, 9.7 percent higher than in 2008.
Bloomberg News
(HK Edition 07/03/2010 page3)