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Howard Stutz

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Celebration of new year helps Macau gaming revenue reach $4.8 billion in February

4 Mar 2014

By Howard Stutz
Macau shattered its single-month record for gaming revenue in February, collecting $4.8 billion from gamblers who were attracted to the market for the Chinese New Year celebration.

The figure, released Monday by Macau’s Gaming Inspection and Coordination Bureau, was the third $4 billion gaming month in the last five months for the only market in China where casinos are legal.

Last October, Macau’s casinos — including properties owned by MGM Resorts International, Las Vegas Sands Corp. and Wynn Resorts, Limited — collected $4.6 billion in gaming revenue. In December, the market reported $4.2 billion.

February’s total was a 40 percent increase over the same month in 2013, shattering analysts expectations of a roughly 30 percent increase.

“While we were expecting February’s growth rate to be notable higher than January, we did not anticipate a 40 percent number,” Union Gaming Group Principal Grant Govertsen said. “Based on trends throughout the month, it appears that the last week of February must have been particularly strong.”

February’s percentage increase was the largest rate of growth since October 2011 at 42.3 percent.

Analysts said the calendar shift of the Chinese New Year Golden Week holiday to Jan. 30 to Feb. 5 this year from Feb. 9-15 last year likely helped February’s results.

“The slowdown leading up to Golden Week fell entirely in January this year,” Susquehanna International Group gaming analyst Rachael Rothman told investors.

In January, Macau gaming revenues grew 7 percent, the first single-digit increase in 12 months.

“We suspect better than anticipated February results will temporarily ease investors’ Macau growth concerns, which emerged more prominently in the wake of a softer than expected January comparison,” said Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski.

Last year, Macau casinos collected a record $45.2 billion in gaming revenue. Coupled with January, Macau’s gaming market is 23.7 percent ahead of 2013’s total.

As a comparison, Strip casinos collected $6.5 billion in 2013.

Wall Street remains bullish on the three Nevada-based casino operators in Macau.

The three companies are building multibillion-dollar resorts on Macau’s Cotai Strip: the $4 billion Wynn Paradise, the $2.6 billion MGM Cotai and the $2.7 billion Las Vegas Sands Parisian. All three are expected to open by 2016.

JP Morgan gaming analyst Joe Greff told investors Las Vegas Sands would be his No. 1 choice among the group “for its outsized growth due to its mass (market) positioning and improving mass (market) table productivity.”

Within its Sands Cotai Central complex, Las Vegas Sands operates three hotel brands — Conrad, Holiday Inn and Sheraton. Combined with The Venetian Macau and Four Seasons Macau, the company’s properties on Cotai have 10,000 guest rooms.

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