UPDATE 1-Macau gambling revenue up 7.3 pct in January y/y

Fri Feb 1, 2013 1:00am EST

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HONG KONG Feb 1 (Reuters) - Gambling revenue in Macau rose a lower-than-expected 7.3 percent in January year-on-year as the traditional lull before the Lunar New Year begins set in.

January's revenue at 26.9 billion patacas ($3.4 billion) was weaker than analysts' forecasts of 10-12 percent growth. Seasonally, Macau gambling revenue dips ahead of the New Year holiday period, which this year starts on Feb. 10. It tends to accelerate once the holiday season begins.

Macau, a Portuguese colony until 1999, raked in $38 billion in annual gambling revenues last year. The tiny enclave about an hour away from Hong Kong by ferry and with a population of half a million, is the only place where people can legally gamble at casinos in China.

Demand from Chinese gamblers, who make up the majority of visitors to Macau, is highly dependent on China's economic and political factors. With China's economy showing only tentative signs of a recovery and a political impetus to control corruption and lavish spending, sentiment for gambling may moderate in the near term, analysts said.

"It is still a very tepid rebound in terms of the political transfer in China," said Michael Ting, an analyst at CIMB-GK Securities in Hong Kong, adding that the VIP market of top-spending gamblers, was still on shaky ground.

VIP gamblers, known to bet 1 million yuan ($160,800) at a time, have scaled back their bets since 2012. The sector had started to show an initial recovery in the last two months of the year after a closely watched national leadership transition in October.

Sands China, U.S. billionaire Sheldon Adelson's Macau unit of his behemoth Las Vegas Sands, posted solid fourth-quarter earnings on Thursday, helping to offset sluggish growth in Las Vegas.

The $40 billion company by market capitalisation, which opened a new hotel tower at its Sheraton property located on Macau's Cotai strip earlier this week, has over a third of Macau's hotel room capacity, a key advantage to help it drive volume, analysts said.

Wynn Macau, Steve Wynn's Macau unit, posted lacklustre Macau earnings on Friday due to the company's limited capacity in Macau at a time when its rivals are adding tables and hotel rooms.

Visitation to Macau has remained weak with arrivals in December falling 2 percent year-on-year. Operators have tried to compensate by raising minimum bets on the gambling tables.

($1 = 6.2188 Chinese yuan)

(Reporting by Farah Master; Editing by Anne Marie Roantree and Matt Driskill)

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