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Macau gaming revenues hit single-month record of $3.92 billion in March

Any predictions of a slowdown in Macau’s gaming market are long forgotten.

The Chinese gaming enclave shattered the region’s monthly gaming revenue record in March, with casinos collecting more than $3.92 billion from gamblers during the month.

The figure eclipsed the previous one-month record of $3.5 billion in gaming revenues, which was set in December. The March total accounted for a 25.4 percent increase over the amount casinos collected in March 2012.

The monthly results were released Tuesday by the Macau Gaming Inspection and Coordination Bureau. The March total is the best year-over-year growth rate since January 2012, when gaming revenues increased by 35 percent.

Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts Ltd. are the three American casino companies operating in Macau.

“We see first-quarter 2013 earnings reports as a major positive catalyst for the group,” JP Morgan gaming analyst Joe Greff told investors, based on the March numbers from Macau.

Shares of the three companies, however, showed little reaction to the news Tuesday.

Wynn Resorts Ltd. had the only price increase, closing at $123.26 on the Nasdaq, up 7 cents or 0.06 percent. MGM Resorts closed at $12.48, down 34 cents or 2.65 percent, while Las Vegas Sands finished the day at $55, down 36 cents or 0.65 percent. Both companies are traded on the New York Stock Exchange.

All three companies are in various stages of expanding their casino presence in Macau.

For the first three months of 2013, Macau gaming revenues are up 14.8 percent over the same period last year. In 2012, Macau collected a record-setting $38 billion in gaming revenues. As a comparison, Strip casinos collected $6.2 billion in gaming revenues in all of 2012.

Analysts expect Macau’s casino industry to continue to churn out record gaming revenues throughout 2013, based on an improved Chinese economic environment, additional infrastructure, and an increased number of hotel rooms and table games.

“Gaming revenue growth may continue to accelerate through the year,” said Wells Fargo Securities gaming analyst Cameron McKnight.

Sterne Agee gaming analyst David Bain thinks the new monthly record will be broken several times this year.

“March marks the first of potentially six all-time monthly gross gaming revenue records we should see in calendar year 2013,” Bain said.

RBC Capital Markets gaming analyst John Kempf said Macau’s March gaming totals were helped by a slightly higher than normal revenue rate from high-end customers. Also, the high-end play revenue in March 2012 was the lowest single month total of the year.

“However, our channel checks suggests the last week of March was similar to the prior week in which operators were seeing strong (high-end) volumes and continued strength in the mass market,” Kempf said.

Several analysts credited increases in visitation to Macau during February and March, which was a combined 2 percent year-over-year hike. The results followed three straight quarters of declines in visitation.

“This is an especially bullish sign for Macau concessionaires with higher exposure to mass gaming, such as Las Vegas Sands,” Bain said.

The Macau International Airport experienced a 22 percent increase in passenger traffic during March. Union Gaming Group gaming analyst Grant Govertsen said the airport handles roughly 6 percent of the total visitation to Macau.

Govertsen said an expansion of a border gate that connects Macau to mainland China could be open by May, which would allow for a maximum daily access of 500,000 people.

Contact reporter Howard Stutz at hstutz@reviewjournal.
com or 702-477-3871. Follow @howardstutz on Twitter.

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