Rising to a record high of 18.869 billion patacas, which is the equivalent of US$2.73 billion, Macau’s casino revenues have reached a record high, rising 50% over last year’s October numbers. Casino revenues are now on track to beat full-year expectations.
Although Macau is a small region, it is the world’s largest gambling market. Strong double-digit casino revenue growth has taken place in the region over the last few years and has boosted the earnings of the area’s casino operators. These casino operators include Las Vegas Sands and Galaxy Entertainment Group. Both companies reported strong earnings last week.
CLSA’s head of Asian gaming research, Aaron Fischer, said that casino stocks like Melco Crown, Sands China, and Wynn Macau would perform well on this news. Fischer added that he could increase his full-year gambling revenue estimates based on the revenues for October.
“There’s a general level of optimism in China that’s translated into an appetite for gaming,” said Fischer. He added that this was partly the result of strong property and equity markets.
“At the same time, the individuals operators are more willing to extend credit, so people are more willing to play,” Fischer said.
October was as successful as it was due in part to the Golden Week holiday, a time characterized by high travel for Chinese gamblers from the mainland. These gamblers flock to Macau during the Golden Week holiday because it is the only place in China where they can gamble legally.
Fischer expected Macau’s gambling revenues to rise 39% over last year. The region’s six casino operators include Sands and Wynn Resorts, Galaxy, SJM Holdings, Melco Crown, and MGM Mirage.
