Macau Ups the Ante, Again

The incredible growth continues in Macau despite tougher year-over-year comparisons. After revenues in Macau grew by 48.0% in March, 47.7% in February, and 33.2% in January, the momentum continued by growing 44.6% in April to $2.56 billion. There seems to be no end in sight to the incredible growth.

For investors so far, the Macau news has been overshadowed by earnings, as investors try to digest how fast casino companies can grow. Las Vegas Sands (NYSE: LVS  ) reported less-than-encouraging results that put a halt to the exuberance temporarily. And competition could be picking up as the year goes on.

In Macau, Galaxy Entertainment is entering the picture with Galaxy Macau near Venetian Macau. That could take gaming revenue from Las Vegas Sands and Melco Crown (Nasdaq: MPEL  ) on the Cotai Strip. And Sands' sites 5 and 6 will open late this year or early next year to add more competition.

But no matter how you think the pie will be sliced, the fact is, the pie is expanding at an incredible rate, so there's enough to go around. MGM Resorts (NYSE: MGM  ) and Wynn Resorts (Nasdaq: WYNN  ) are both enjoying success in Macau, and both are looking forward to joining the Cotai Strip in the future.

So far this year, Macau has averaged 43.4% revenue growth over last year, but comparisons get tougher as the year moves on. How much do you think gaming revenue will grow this year? And what will be the monthly gaming revenue in December? Leave your best guess in our comments section below.

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Fool contributor Travis Hoium owns shares of Melco Crown and is short MGM Resorts. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

Melco Crown Entertainment is a Motley Fool Global Gains recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 06, 2011, at 5:49 PM, Senescent wrote:

    Travis,

    My model says 2011 gross win will be 260.331 billion patancas. An increase of 38.22% over last year. December gross win will be 24.924 billion patancas. I know that is a ridiculously precise prediction. It's probably on the low side because Galaxy Macao should expand the market - maybe an extra 2 billion patancas through the end of the year and 600 million patancas in December.

  • Report this Comment On May 07, 2011, at 10:28 AM, RickRickert4MVP wrote:

    what's a patanca?

  • Report this Comment On May 07, 2011, at 1:08 PM, Senescent wrote:

    It's the currency used in Macao - about the same as a Hong Kong dollar

  • Report this Comment On May 07, 2011, at 1:12 PM, Senescent wrote:

    It's actually spelled Pataca with an accent on the C that sounds like an N in Portuguese. Likewise Macau is spelled Macao in Portuguese but it sounds like Macau.

  • Report this Comment On May 09, 2011, at 11:58 AM, spokanimal wrote:

    So, you think the opening of Galaxy Macau "could take gaming revenue from Las Vegas Sands".

    Question: When COD (oops, sorry... City Of Dreams) opened 2 years ago, how much did that event increase Cotai's overall share of the Macau mass gaming market?

    Question: When a patron stays at resort A, how much of their gaming dollar is usually spent at their second choice for a gambling venue (resort B) and where is resort B usually physically located relative to resort A?

    Question: On the strip in Las Vegas, what type of nearby resort do those who stay in 3-star resorts generally walk to to gamble: A) 2-star resorts; B) 3-star resorts; C) 4-star resorts; D) 5-star resorts.

    Onceyou can answer these questions, perhaps you could write another foolish article and talk about how you think market shares will be affected as Galaxy Macau and SCL sites 5&6 open up over the next 18 months.

    Spokanimal

  • Report this Comment On November 30, 2011, at 12:10 PM, scsc2010 wrote:

    What is Galaxy's Ticker?

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