Macau Casino Revenue hits a Record $38b in 2012
Throughout much of the year, we’ve seen Macau’s casino revenue growth slow down. A couple of reasons why are because of China’s slowing economy and the decreased amount of high roller action. But even with these recent problems, Macau casinos managed to earn a world record US$38 billion in 2012, which is up 13.5% from last year.
However, it is worth mentioning that the $33.5 billion earned in 2011 was a massive 42% increase from the previous year. And 42% growth proved to be a near-impossible mark to reach for the casinos this time around. Even still, Macau continues to break records and experience unparalleled success.
Most of the territory’s 35 casinos should be happy about how the year ended since they collectively pulled in $3.5 billion in December – up 20% from December, 2011. Kim Eng Securities HK analyst Jeremy Tan commented on this with the following statement:
This is definitely better than our expectation, and much higher than the street estimates. It’s a combination of higher holiday footfall, higher win- rate, and a return to VIP market.
Based on how December played out and the 13.5% overall growth in 2012, Macau casinos are expecting the upward trend to continue in 2013. In fact, some companies are dumping lots of money into their operations for the new year. Galaxy Entertainment is one of these companies, and they’re spending $6.5 billion on a Cotai strip establishment. Wynn Macau and MGM China Holdings are also ready to build new Cotai casinos as well.
Despite this vote of confidence, Macau faces some big challenges in 2013. First off, there’s the previously discussed slowing Chinese economy and reduced high stakes play. A new smoking ban and increased crime throughout the region are also major concerns. Plus the casinos are already working at optimal level right now. CLSA Ltd. analyst Aaron Fischer addressed this when he said, “For 2013 we are still not expecting it to be a fantastic year because the casino properties are already running at full capacity.”