Macau Casino Revenue Hits $38bn In 2012

Macau has now released its casino results for the whole of 2012, revealing a 13.5% rise in revenue to $38 billion. Despite China’s only gambling resort continuing its upward trend, the figure is significantly down on 2011 which recorded a 42% increase in revenue to $33.5 billion.
Nevertheless, despite Macau’s growth rate being down due to China’s slowing economy and the concerns of its high-rolling businessmen, the former Portuguese colony has been booming since 2002 when a four decade casino monopoly policy ended. In 2006, Macau then usurped Las Vegas as the world’s biggest gambling resort and in 2011 generated almost six times the revenue of its nearest competitor.
In December, Macau’s 35 casinos also hit a monthly record after revenue rose 20% to a massive $3.5 billion. Commenting on December’s impressive result, Kim Eng Securities HK analyst Jeremy Tan, said: “This is definitely better than our expectation, and much higher than the street estimates. It’s a combination of higher holiday footfall, higher win- rate, and a return to VIP market.”
Macau’s six main casino operators are now banking on continued growth in Macau as they seek to further expand their businesses in the Chinese gambling hub. Galaxy Entertainment founder Lui Che Woo, for instance, said his company intends to spend a further $6.5 billion throughout 2013, as construction begins on its resort on the Cotai strip. In addition, other operators such as Wynn Macau and MGM China Holdings have also received the go-ahead to build resorts on Cotai.
However, Macau still faces many challenges going forward, not least due to the slowing Chinese economy, VIP junket crack-downs, and a new anti-smoking regulation starting in 2013. As Aaron Fischer from CLSA Ltd explains: “For 2013 we are still not expecting it to be a fantastic year because the casino properties are already running at full capacity.”