* China's Golden Week seen as key reason for record
* Gaming stocks outperform benchmark index
* Execs, Fitch say growth trend strong going forward
By Farah Master
HONG KONG, Nov 1 Gambling revenue in glitzy
Macau, the world's largest gaming destination, broke a new
record in October rising 42 percent on the year to 26.9 billion
patacas ($3.4 billion), with relentless demand from Chinese
visitors continuing to defy concerns over the global economy and
a domestic credit squeeze.
Widely expected to hit a new record because of China's
Golden Week holiday, October revenue easily beat August's high
of 24.8 billion patacas, according to government figures
released on Tuesday.
The former Portuguese colony, an hour from Hong Kong by
ferry, is the only place in China in which casino gambling is
legal, helping revenue there exceed that of neon rival Las Vegas
Despite strong third-quarter earnings, shares of the
multi-billion-dollar gaming companies operating in the enclave
have been volatile, with investors wary of slowing growth next
Las Vegas Sands Corp , Sands China Ltd ,
Wynn Resorts Ltd , Wynn Macau Ltd , MGM Resorts
International , MGM China Holdings Ltd , Melco
Crown Entertainment Ltd , Galaxy Entertainment Group Ltd
and SJM Holdings Ltd , are the listed
entities of the six licensed Macau operators.
Worries that a credit squeeze in China would impact Macau's
lucrative junket industry has sapped sentiment over the last two
months despite the junkets, facilitators who advance loans to
wealthy Chinese gamblers and collect debts afterwards, saying it
was business as normal.
Casino executives have said they do not expect growth to stay
at 40-50 percent indefinitely, but that fundamentals of the
lucrative industry remain solid because of factors including
still untapped Chinese demand, an appreciating renminbi, and
rising wages across the country.
On Tuesday, shares of the Hong Kong-listed gaming companies
pared earlier losses on Tuesday after the results, outperforming
the benchmark Hang Seng Index's 2.49 percent decline.
The October revenue figure of $3.4 billion is more
than half of what Las Vegas is expected to make for the whole of
"This may imply that the market has not shown any signs of
slowing at all. It is a very good indication, said Victor Yip,
analyst for UOB Kay Hian brokerage in Hong Kong.
LOOKING TO THE FUTURE
Infamous as a one-time hotbed for piracy and smuggling,
Macau has pushed companies to expand their non-gaming amenities
to attract more families and leisure tourists. The tiny enclave
sees a monthly visitor inflows of close to 3 million.
Yet Macau pales in comparison to Las Vegas in non-gaming
revenue spending, with relatively few cash-rich mainlanders
arriving with the intent of indulging in spas or watching shows.
He Xing, one of a growing number of female punters, said she
came to Macau with friends to gamble. At 10.30 a.m. during
Golden Week, the thirty year old is waiting for her turn to bet
at MGM's Macau casino.
"It's fun; I come here whenever I can," said He, sunglasses
perched atop her tinted hair and a Louis Vuitton bag dangling
from her right arm.
Fitch Ratings said in a report released on Oct. 28 that it
had seen no evidence that tighter credit conditions and slowing
growth in China were pressuring gaming demand in Macau."
"Fitch continues to believe that the Macau market will grow
solidly, albeit at a decelerating rate, moving into 2012.
Fitch's 2012 base case forecast assumes that revenue will grow
by 20 percent or more again next year," the agency said.