Macau gaming revenues jump 66 percent in December

Macau came close to doubling that mark in 2010.

Gaming revenues in the Chinese Special Administrative Region grew by 58 percent during the year despite talk of the government taking steps to slow the remarkable growth.

The nearly 40 small and large casinos in Macau collected gaming revenues of 188 billion patacas, which translated into roughly $23.4 billion in U.S. dollars based on currency conversion rates.

“These results are above expectations and confirm our belief that Macau gaming revenues will continue to be strong in 2011, even despite a modest cooling of the Chinese economy,” Jefferies & Co. gaming analyst David Katz told investors.

In 2009, full-year gaming revenues grew 10 percent in Macau.

The Macau Gaming Inspection and Coordination Bureau announced Monday the market generated gross gaming revenues of 18.9 billion patacas in December, an increase of 66 percent compared with the same month a year ago.

The figure translated into roughly $2.4 billion in U.S. dollars based on currency conversion rates.

The figures fueled a jump in the stock prices for two of the three Las Vegas-based companies that operate casinos in Macau.

Shares of Wynn Resorts, traded on the Nasdaq National Market, had the highest increase, 4.96 percent, or $5.15, to close at $108.99. Wynn operates Wynn Macau and the Encore at Wynn Macau.

Shares of MGM Resorts International, which owns 50 percent of the MGM Grand Macau, grew 3.57 percent on the New York Stock Exchange to close at $15.38, up 53 cents.

Meanwhile, Las Vegas Sands Corp., which operates three resorts including the Venetian Macau and Sands Macau, saw its stock price drop on the New York Stock Exchange to 36 cents, or 0.78 percent, to $45.59.

Macau’s yearly gaming revenue increase came despite China’s recent tightening of its monetary policy and partial junket commission caps.

“With this in mind, we believe the profit story for Macau concessionaires over the next year could be significantly higher than current expectations,” Union Gaming Group principal Bill Lerner said in a note to his firm’s clients.

Macau’s December gaming figures surpassed last October as the largest gambling month on record for the region. October included the popular Chinese Golden Week holiday and one additional weekend compared with December.

Wells Fargo Securities gaming analyst Carlo Santarelli said the December results were “considerably stronger than most expectations coming into the period.”

Macau is the only location in China where gambling is legal.

“The strength in market share here should put to rest any investor concern on the potential negative impact of increased VIP commission competition,” JP Morgan gaming analyst Joe Greff said.

During December, casinos operated by Hong Kong billionaire Stanley Ho controlled 31 percent of Macau’s gambling market. Wynn Resorts had 17 percent of the market while Las Vegas Sands had 16.5 percent. MGM Resorts’ one casino had 10 percent of the market.

Macau is continuing to expand.

Hong Kong-based Galaxy Entertainment is building a $1.9 billion resort that is expected to open this year on the Cotai Strip. Las Vegas Sands plans to add 6,400 hotel rooms and increase casino capacity through five different properties on the Cotai Strip over the next two years.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.