UPDATE 1-Stanley Ho's SJM Q1 net up 85 pct on record gaming revenue

(Adds details, analyst comments)

HONG KONG May 17 (Reuters) - Macau casino operator SJM Holdings Ltd , owned by gaming tycoon Stanley Ho, posted an 85 percent rise in first-quarter net profit, propelled by record gaming revenue in Macau, the world's biggest gambling market.

SJM said net profit was HK$1.4 billion for the first three months, compared with HK$760 million a year earlier. This was above a forecast of HK$1.2 billion from RBS in Hong Kong, one of the few firms to give a projection.

Shares in SJM have risen more than 250 percent over the past 12 months, jumping nearly 50 percent in the past two months after the resolution of a public legal spat between Ho and his extended family over his stake in the $13 billion company.

SJM closed down 2.7 percent, in line with the gaming sector, ahead of the results.

Ho, dubbed Macau's "casino king" for his pervasive influence in the former Portuguese colony, still controls about 30 percent of the gaming market despite growing competition from U.S. casino moguls Sheldon Adelson with his Las Vegas Sands Corp unit Sands China Ltd , and Steve Wynn's Wynn Macau Ltd , a subsidiary of Wynn Resorts Ltd .

"Top line wise it is about 3.2 percent above my expectation," said Gabriel Chan, analyst at Credit Suisse in Hong Kong, citing a favourable outlook for SJM in the coming year due to strong growth in the market.

Ho operates around 20 casinos in Macau, including his flagship Grand Lisboa casino, as well as 14 third party promoted casinos known as "satellite casinos".

"The satellite casinos are holding up very well, even better than Grand Lisboa so if that trend continues, in a strong market, their (SJM's) ability to grow will still be pretty robust," he said.

HOT MACAU MARKET

MGM Resorts International , Melco Crown Entertainment Ltd and Galaxy Entertainment Group Ltd are the other three licensed operators vying to increase their market share in Macau by targeting China's burgeoning middle class.

MGM, co-owned by Ho's daughter Pansy, is planning to list its Macau unit in a $1.5 billion offering on the Hong Kong stock exchange. [ID:nL4E7GH02U]

Macau is the only place in China in which mainlanders are legally allowed to gamble in casinos, prompting analysts to remain bullish on the outlook for the glitzy enclave, citing very low penetration levels and rising consumer power.

The launch of Galaxy's new $2 billion casino earlier this week, is likely to further propel even stronger revenue growth, casino magnate Steve Wynn told reporters on Tuesday.[ID:nL4E7GH0UD][ID:nL4E7GG06E]

Gaming revenue in the former Portuguese colony has soared over the past year, with revenue streams eclipsing Macau's neon rival Las Vegas about fourfold.

Macau posted a total of $10 billion in gaming revenue for the first four months of this year, matching Las Vegas' total figure for the whole of 2010. (Reporting by Farah Master; Editing by Jacqueline Wong)