UPDATE 1-Macau says gambling revenue up 35 pct in Jan

* 25 bln patacas in Jan towards higher end of analyst estimates

* Feb revenues to fall due to seasonal timing of holiday

* Gaming stocks trend up against HSI

By Farah Master

HONG KONG, Feb 1 (Reuters) - Gambling revenue in Macau, the world's largest gambling destination, jumped 34.8 percent in January to 25 billion patacas ($3.13 billion), government figures showed on Wednesday, boosted by a record flow of Chinese visitors during the Lunar New Year holiday.

One of the world's fastest growing economies, Macau has remained relatively cushioned from global economic turbulence as wealthy mainland gamblers continue to swarm into the tiny enclave on the lip of China's southern coast.

Investors and analysts remain cautious on the outlook for the coming year, pricing in a slowdown in growth from 42 percent in 2011 to 11-20 percent in 2012.

Las Vegas Sands, Sands China, Wynn Resorts , Wynn Macau, report fourth quarter earnings this week with analysts expecting strong growth in mass gaming revenue due to resilient domestic spending.

Growth of mass market visitors, made up of families and middle class mainlanders, is expected to overtake that of VIP high rollers for the first time this year, with pockets of China's wealthy expected to take a disproportionate hit from falling property prices and slowing export growth.

While January's revenue number was towards the higher end of analyst estimates, ranging from 23-26 billion patacas, Philip Tulk, Head of Casinos & Gaming Research at Royal Bank of Scotland in Hong Kong, said it was unlikely people would rethink their forecasts.

"I don't think people will be revising up estimates on the back of one month," he said.

Macro economic risks are likely to hamper the strength of VIP revenues with the capital efficiency and balance sheets of junkets -- middlemen who provide millions in loans to mainlanders helping them bypass currency controls -- more under pressure.

Additionally, the timing of China's new year holiday in 2012, falling in January instead of February as in 2011, suggests that revenues in the second month are likely to trend down year-on-year.

Gaming stocks in the multi-billion dollar casino firms have gained between 4-21 percent since the start of the year compared with the Hang Seng Index, up around 10 percent.

Investors had heavily sold out of the sector in the fourth quarter last year on concerns of a steep slowdown in China.

MILDLY POSITIVE

"Stocks have had a great start to the year and they fell off fairly markedly yesterday in a day when the Hang Seng Index went up. You have to assume the reason they fell is because of reports of 24 billion patacas January revenue. Obviously this number has beaten that by a decent amount. These results should be viewed as moderately positive," Tulk at RBS said.

China's factory sector expanded slightly in January, supporting hopes that the world's second biggest economy will avoid a hard landing, but weakening external demand and a slowdown in the rate of property investment is expected to weigh on economic growth in the first quarter.

Macau's government is keen to reduce its reliance on high roller VIP players, who accrue more than 80 percent of gaming revenues yet make up a fraction of the millions of people flocking to its garish casinos.

The development of the Cotai strip, where Sands China will open a new $4 billion casino in April this year, is focused on conferences, entertainment and retail in an effort to generate more stable revenue flows.

Officials are also trying to promote cultural activities to visitors -- numbering 28 million last year -- hoping they will spend more time sampling Portuguese egg tarts and sightseeing at Macau's historical churches than around the baccarat tables in dimly lit casino halls.

While Macau's gaming revenue easily trumps that of Las Vegas, its non-gaming component accounts for less than 5 percent of total revenue. In Las Vegas, earnings from shows, conventions and dining account for more than half of total revenue.