Macau Gaming Growth Continues

Macau gaming revenue grew 11.5% in February, robust growth for the gambling enclave, but investors shouldn't set their sights too high. Now that Macau is nearly six times the size of the Las Vegas Strip, investors shouldn't expect double-digit growth every month. Alison Southwick sat down with analyst Travis Hoium to look at where we should set expectations in Macau and how to play the market now. 

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  • Report this Comment On March 05, 2013, at 1:11 PM, berg80 wrote:

    Trav,

    Congratulations on promoting yourself to the position of analyst!! What credentials do you have to make the claim? Subscribing to Money Magazine?

  • Report this Comment On March 05, 2013, at 1:25 PM, spokanimal wrote:

    The 11.5% YOY increase in macau gaming revenues is roughly 2.8 billion patacas more than last february.

    If you added 2.8 billion in gaming revenues to the total Macau gaming revenues tallied in the spring of 2009, that would have constituted an increase approaching 35%.

    The point, of course, is that today's growth is off a MUCH higher base of business.

    Given the growth we are seeing in the midst of the growth we are seeing in the wake of China's economic "soft landing", and the fact that there will be no new resorts and precious few new gaming table allocations in Macau to absorb it's growth over the next 2 years, it's certainly shaping up to be a "supply crunch"... and the associated ramps in "table minimums" that typically accompany such suppliers' markets.

    We are also seeing a surging migration to Cotai from the older, smaller, downtown resorts. Indeed, Melco's City of Dreams is getting quite a "coat-tail" effect from it's huge, new, next-door neighbor resort. Given all the new train infrastructure feeding gamblers into macau, and the cotai emphasis on the mass-market gamblers that tend to ride those trains, the future obviously bodes well for Sand's 9,000 hotel rooms on Cotai, which, when combined with their downtown hotel room inventory, constitutes more hotel rooms than all of the other macau gaming concessionaires combined...

    ... should be quite a year for that particular company.

    Spokanimal

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