Macau’s March gaming revenues surpassed US billion for the second consecutive month as demand from mainland Chinese visitors shows no signs of tapering.
Historically a slow month following Chinese New Year, March posted $4.4 billion, a 13 percent increase year on year. It is the third-biggest haul of any month ever and was achieved against a tough 2013 comp of plus-25 percent and despite an unfavorable calendar with one less Friday.
It came on the heels of February’s record $4.8 billion, which was driven by a surge in mainland visitation for the weeklong Lunar New Year holiday.
The $12.6 billion in gaming revenue amassed through the first quarter is 20 percent higher than the same period last year and is already double Singapore’s total take for 2013 and nearly twice the Las Vegas Strip’s 2013 total of $6.7 billion.
Macau posted $45 billion in GGR in 2013, a number analysts now believe could be left in the dust in 2014.
Union Gaming Research Macau, which is forecasting 14 percent revenue growth for year, now believes 20 percent is within reach.
“Macau gaming trends are still strong across all relevant segments (VIP, premium mass, mass, grind mass) despite recent macro China fears, as well as concerns on various growth drivers such as UnionPay,” said lead analyst Grant Govertsen. “To date, we are not seeing any indications that Macau’s gaming industry is experiencing any such related weakness. Should April result in 20 percent (or better) growth, this would indicate to us that the rest of the year is likely to remain on pace to exceed our current forecast by at least 200 to 300 basis points.”
Forbes said, “Industry experts believe that a $5 billion month is inevitable, though a year ago, they believed that milestone would have to wait for next year’s new casino openings or some other catalytic event. The February figure suggests that’s not necessarily the case.”
No new casinos are opening in Macau this year, but the market is expected to see the debut of two new large-scale resorts on Cotai in 2015, the first of six slated to come online over the next four years in the booming tourist district, which occupies a swath of reclaimed land between the islands of Taipa and Colane and is home currently to five megaresort complexes.
The rapid growth showed that Las Vegas Sands Chairman and CEO Sheldon Adelson was right again. In 2004, Adelson justified his multibillion-dollar investment in Macau by saying the onetime Portuguese colony would become “the Las Vegas of Asia.”
Now, according to Forbes magazine, it may be more apt to call Las Vegas “the little Macau of America.”
Last year, Macau’s total gaming revenue topped out at $45.2 billion, about seven times the annual win in Las Vegas. And more than 90 percent of that revenue is from gaming, whereas Sin City derives less than half from its casino games.
There are other similarities, and some striking differences, Forbes reported. In Nevada, slot machines account for more than 60 percent of gaming revenue. In Macau, slot machine revenue comprises less than 4 percent of play. And Macau’s gaming revenue comes mostly from high rollers.
More than ever, junkets are introducing those high-level customers to Macau. Some of them buy in at $250,000 or more, of which promoters get a 1.25 percent commission. Many come from mainland China, and those top-tier players wagered almost $1 trillion at Macau’s VIP tables last year.
“That tsunami of mainland money also keeps shares rising for Macau’s six casino operators, Galaxy Entertainment Group, MGM China Holdings, Melco Crown Entertainment, SJM Holdings, Sands China and Wynn Macau,” Forbes reported. “And it keeps the little Macau of America shrinking in the global gaming capital’s rearview mirror.”
