Macau, once known as the “Vegas of the Orient”, now far outstrips its North American counterpart in total gaming revenues. According to data released today by Macau’s Gaming Inspection and Coordination Bureau, total gaming revenues exceeded $45.2 billion in 2013.
That $45 billion gaming revenue total for Macau represents an 18.6% year-over-year growth rate for the island gambling haven, exceeding even the most optimistic analyst’s 18% growth projection.
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The China factor
The increasingly affluent and mobile Chinese upper-middle class is fueling most of Macau’s boom. Macau, a Portuguese territory until becoming a quasi-independent part of China in 1999, attracted more than 17 million Chinese tourists in the first 11 months of 2013. More than 1.56 million Chinese visited Macau in November alone, according to Bloomberg Industries.
Vegas versus Macau
Macau’s gaming revenues outstripped Vegas’ long ago, but the magnitude of the growth over the last decade and change is staggering. The Las Vegas Strip generated $5.8 billion in total gaming revenues from January to November this year. Macau’s casino revenue in the same period was close to $41 billion, over seven times that of Vegas.
Growth might slow in 2H 2014
The dizzying growth in casinos and revenues in Macau might finally slow down in the second half of the year, according to Bloomberg Industries, who points to the absence of new properties opening up in the next few quarters.
Industry insiders paint a more positive picture. Deputy Chairman Francis Lui of the Galaxy Entertainment Group Limited (HKG:0027) projects casino revenue will increase as much as 20 percent in 2014. MGM China Holdings Limited (HKG:2282) Chief Executive Officer Grant Bowie said in an interview in December that he believes casino revenue growth will be in the low teens this year as the size of the industry becomes a factor in the growth rate.
Sands China, Sheldon Adelson’s Macau casino enterprise, was up over 1% to close at HK$63.95 in Hong Kong. SJM Holdings Ltd. (880) was down 0.77 percent, Galaxy Entertainment gained 1.4 percent and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) was off 0.3 percent. The Hang Seng Index increased by 0.1% for the session.