Sun, Oct 02, 2016 - Page 16 News List

Macau gambling revenue rises for second month

Reuters, HONG KONG

The world’s biggest casino hub, Macau, posted a better-than-expected 7.4 percent rise in gambling revenue last month, marking the second consecutive month of growth after more than two years of decline, as new resorts spur spending in the southern Chinese territory.

Multi-billion-dollar casino openings by Sands China Ltd (金沙中國) and Wynn Macau Ltd (永利澳門) helped attract VIP customers, whose numbers have dwindled in the former Portuguese colony since the start of 2014 when the Chinese government began a campaign against shows of wealth by public officials.

A specially administered region of China, Macau is the only place in the country where casino gambling is legal.

Revenue has fallen to five-year lows, but has ticked up since the openings in August and last month.

Gambling revenue last month was 18.4 billion patacas (US$2.3 billion), government data showed yesterday.

The forecasts were higher than analyst estimates, which ranged from unchanged on the year to a 5 percent rise.

While growth edged up from August’s 1 percent, overall revenue was still relatively muted.

Analysts said the boost was due to casino credit being extended to wealthy gamblers to encourage big betting in the new properties, but they questioned how long the uptick would last.

“We are concerned with the sustainability and quality of the gross gaming revenue improvement,” Nomura Securities analyst Richard Huang (黃立舜) said.

Revenue from mass market players had failed to grow significantly and new increases were from low-income VIP players, he said.

Growth in the VIP segment is typically more volatile than the mass market segment and can cause large swings in overall revenue. To reduce reliance on high-rollers, the national and Macau governments have been adamant that the tiny territory would diversify into general leisure and tourism.

Overnight visitors have grown since August, due to operators attracting customers with cheaper hotel rooms and promotions, but individual spending is muted.

Looking ahead, analysts said a rebound in spending remains a challenge, despite new attractions, including a mock Eiffel tower and aerial gondola, due to slowing market growth and infrastructure bottlenecks that hinder larger visitation into Macau.

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