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Macau casinos again top $4 billion in monthly gaming revenues

4 Apr 2014

By Howard Stutz
Another month, another $4 billion in gaming revenue for Macau casinos.

Macau’s gaming market didn’t show any slowdown in March after February’s Chinese New Year holiday, growing revenue 13.1 percent during the month, according to figures released Tuesday by the Gaming Inspection and Coordination Bureau.

For the month, Macau casinos collected $4.4 billion in gaming revenue, the market’s second straight $4 billion revenue month and third out of the past sixth months.

The March figure was the third highest on record for Macau, behind February’s $4.8 billion and $4.6 billion last October.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said investors grew concerned that Macau might be facing a slow March following the record-breaking February figure. However, that worry didn’t pan out.

“We got the feeling investors were placing far too much emphasis on the weekly numbers coming out of Macau, effectively detracting from what remains an overly attractive long-term growth story, in our view,” Wieczynski said.

Through the first three months of the year, Macau gaming revenue is up almost 20 percent higher when compared to the first three months of 2013. Last year, Macau casinos collected a record $45.2 billion in gaming revenue.

“Macau gaming trends are still strong across all relevant segments despite recent macro China fears, as well as concerns on various growth drivers,” said Union Gaming Group analyst Grant Govertsen, who is based in Macau. “To date we are not seeing any indications that Macau’s gaming industry is experiencing any such related weakness.”

Wall Street remains bullish on the three Nevada-based casino operators in Macau — Las Vegas Sands Corp., Wynn Resorts, Limited and MGM Resorts International.

All three companies are in the process of building new multibillion-dollar hotel-casino developments on the region’s Cotai Strip: the $4 billion Wynn Paradise, the $2.9 billion MGM Cotai and the $2.7 billion Las Vegas Sands Parisian.

The developments are expected to open by 2016.

Govertsen said the boost in the March numbers came despite several trends that seemed to be working against the market, including a comparison to March 2013, when gaming revenue grew 25 percent.

Analysts said the market should continue to see double-digit growth figures throughout 2014.

“Despite some extended Chinese New Year-related VIP events in the market in early March, we expect this year’s trends to remain largely static from a seasonal perspective,” said Deutsche Bank gaming analyst Carlo Santarelli.

Nomura Securities gaming analyst Harry Curtis said Macau gaming revenue continues to grow in line or above expectations.

“History has shown that Macau’s gaming revenues continue to increase at a significantly higher pace than regional gross domestic product growth despite doubts about China’s economy,” Curtis said. “Another positive is that the discounting of Cotai projects now coming out of the ground should lift stock prices this year, in our view.”

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