Macau gaming revenue soared 40 percent to a new monthly record in February on a flood of mainland Chinese visitors to the world’s largest gambling hub during Chinese New Year.
Revenue hit MOP38 billion (US$4.8 billion), beating the MOP36 billion median forecast by seven analysts polled by Bloomberg News.
The previous record was MOP36.5 billion set last October. February’s rate of growth was the fastest since October 2011’s 42.3 percent.
Sands China led the market with 25 percent of revenue, ousting SJM Holdings from its long reign as No. 1. The company founded by casino tycoon Stanley Ho finished the month with 22 percent, down 100 basis points from January. Galaxy Entertainment Group was third with 21 percent, followed by Melco Crown Entertainment (12 percent), Wynn Macau (11 percent) and MGM China Holdings (9 percent).
It’s estimated that more than 1 million people visited the city, the only legal casino market in China, over the New Year holiday, which ran from January 31 to February 6. More than 770,000 of them came from mainland China, an increase of 23 percent over a year earlier, according to the Macau Government Tourist Office.
“Clearly, it’s evidence that there’s still pent-up demand to play from mainland customers,” Standard Chartered investment analyst Philip Tulk, based in Hong Kong. “Macau’s becoming a more accessible and realistic spot for visitation.”
In all, gaming revenue is up 24 percent through the first two months of the year to MOP66.7 billion ($8.33 billion), but the pace could begin to slow on tougher year-on-year comps.
“Growth in March will slow due to the higher base,” said Aaron Fischer, a Hong Kong-based analyst at CLSA. “The full-year outlook remains very positive, especially for the higher-margin mass-market segment.”
The six operators took in US$45.2 billion last year, about seven times that of the Las Vegas Strip, and they could surpass that by leaps and bounds this year. Analyst Grant Govertsen, a principal with Union Gaming Research Macau, says historical trends suggest his own forecast of 14 percent for 2014 could be well on the low wide.
“Over the past four years, average monthly (gross gaming revenue) from March to December was nearly 13 percent higher than the average monthly GGR during January and February,” he wrote in a note to investors. “Should 2014 be true to form this would put Macau on pace for nearly 23 percent GGR growth during 2014. This would be significantly above current consensus expectations and could lead to notable upward estimates revisions.”
