- October gambling revenue hit $3.3 billion
- Longer holiday period saw tourism from mainland China increase by 11 percent
Gambling revenue in the Chinese casino haven of Macau rose by 22 percent during the month of October, exceeding expectations to record a three-year high, fuelled by a national Chinese holiday that led to a significant increase in tourism to the casino hub.
The former Portuguese colony on China’s southern coast remains the only territory in China where casino gambling is legal, and the holiday period saw more Chinese citizens than usual flock to Macau.
Monthly casino revenue was 26.6 billion patacas ($3.3 billion), which is up on last year’s figure and in excess of the expectations of analysts, who had predicted an increase of between 13 and 18 percent. It also represents the fifteenth consecutive month of revenue growth in the territory.
The Chinese holiday period, which this year ran a day longer than last year, lasted from October 1 to October 8 and visitor numbers from the mainland rose by 11 percent on 2016 for that period, with MGM China and Wynn Macau reporting their hotels were fully booked.
Macau’s third quarter growth has been boosted by significant growth in the high roller VIP demographic, suggesting that the effects of the recent Chinese government financial crackdowns, which had hit high roller revenue, are largely over, or at least have found a level at which revenues can climb again.
Earnings released by Sands and Wynn last week showed strong gains in the VIP sector, but industry analysts are cautious about the prospects of Macau sustaining the same level of revenue growth due to factors such as the slowing of the money supply growth and the pricing of real estate.
Casino operators are also keen to focus on the mass market section of their customer base, which is less volatile than the VIP segment. The key to success in this area may depend on whether an operator has a presence on the Cotai Strip – a newly-developed area of land that is already the base for a number of luxury resorts.
Sands China and Wynn Macau, which have resorts in Cotai, are outperforming operators such as SJM Holdings, which has not yet established itself on the Strip.
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