* Year-on-year growth beats expectations
* Revenues supported by holiday in China
* Outlook overshadowed by slowing Chinese economy
By Farah Master
HONG KONG, Nov 1 Gambling revenue in Macau rose
a better-than-expected 3.2 percent in October year-on-year,
buoyed by a week-long holiday in China that enabled cash-rich
mainland gamblers to bet in the world's largest casino market.
October's revenue of 27.7 billion patacas ($3.5 billion) was
the strongest monthly figure so far this year. Analysts had
forecast growth in the tiny enclave on China's southern coast to
be up around 2 percent during the month.
While the data could provide a short-term boost for the
market, the outlook is still overshadowed by slowing economic
growth in China that could weigh on revenues going forward.
The former Portuguese colony, one hour from Hong Kong by
ferry, is the only place in China where people can legally
gamble at casinos.
Slower economic growth in China and heightened political
scrutiny as the country prepares for a generational power shift
have kept many wealthy Chinese gamblers away from Macau's
Spending by China's expanding middle class has kept overall
gambling revenues from dropping significantly, but growth rates
have fallen substantially over the past six months.
Macau's economy, one of the world's fastest growing last
year, is heavily dependent on the casino industry. The sector
contributes around 40 percent of gross domestic product.
Visitor levels have continued to trend downwards with
September registering a 0.2 percent year-on-year decline,
magnifying competitive pressure among the six casino operators,
including Las Vegas operator Steve Wynn through his unit Wynn
In October, the Macau government approved land concession
contracts for the Chinese arm of MGM Resorts, MGM China
, and local player SJM Holdings. A swathe of
new casino resorts is set to open starting in 2015.
China's National Congress of the Communist Party starting
Nov. 8, where China's new political leaders will be appointed,
may help create more certainty for Macau's VIP market, said
Gabriel Chan, director at Credit Suisse in Hong Kong.
Junkets -- companies that advance credit to wealthy gamblers
and help them circumvent currency controls -- had cut the amount
of credit issued to gamblers due to delays in recouping loans
and sluggish demand from gamblers.
Chan said junkets may now feel more confident to resume
lending after the political transition is complete.
Improved transport links from the mainland to Macau, which
lies along China's Pearl River Delta, will also help bring in
visitors once new rail extensions are complete starting early