* Revenue for 2012 grows 13.5 percent
* Outlook for 2013 clouded by new regulations
* Special administrative region pushing to diversify
By Farah Master
HONG KONG, Jan 2 Macau, the world's largest
casino market, raked in $38 billion in annual gambling revenues
in 2012 after monthly revenues for December hit a record, a
signal of sustained strength in the only place in China where
visitors are able to legally gamble in casinos.
December's revenue growth of 19.6 percent, which came in
ahead of forecasts of 16-18 percent, was boosted by stronger
visitation numbers during the holiday season. The monthly figure
of 28.25 billion patacas ($3.54 billion) was the strongest ever,
according to data from the Macau government released on
Located on China's southern coast, Macau, a special
administrative region like neighbouring Hong Kong, had seen
gambling revenue growth fall sharply in 2012 due to lower
spending by VIP customers who account for 70 percent of total
revenues. Annual gambling revenue for 2012 rose 13.5 percent
versus 2011 when revenues rose 42.2 percent.
Slower economic growth in China, tighter scrutiny of money
transfers and moves to combat the country's entrenched
corruption had dampened sentiment last year.
As a result, casino operators, including Las Vegas tycoons
Sheldon Adelson and Steve Wynn, who own properties in Macau, saw
earnings growth topple from 2011 due to subdued appetite from
VIP Chinese gamblers and growing competition from Asian
operators such as Galaxy Entertainment Group Ltd.
The stronger-than-expected monthly figure is positive for
the market said analysts, but with no new supply set to open in
Macau for the next two years, a new anti-smoking regulation that
comes into effect in 2013 and tighter scrutiny over the VIP
junket market, casino operators are in a more challenging
position to boost revenues.
"For 2013 we are still not expecting it to be a fantastic
year because the casino properties are already running at full
capacity," said Aaron Fischer, head of Asia consumer and gaming
research at brokerage CLSA Ltd in Hong Kong.
Higher spending by China's burgeoning middle class has been
a key factor in propelling revenue gains in 2012, offsetting a
slowdown in VIP growth. Whether volumes in the high end VIP
market will stabilise and accelerate further on the back of
stronger economic growth is an issue over which analysts remain
Estimates for 2013 gambling revenue growth range from 5-10
percent with the central government keen to maintain Macau's
growth rate at a similar pace to the country's GDP rate, say
Authorities are pushing to diversify the gambling-dependent
hub with more leisure offerings in the hope of attracting a
wider visitor base, including a wedding incentive scheme the
Macau government launched in November that grants 300 patacas
per local guest for their activities in Macau.
Analysts remain upbeat for Macau's outlook, citing an
improving economy in China and infrastructure developments that
will shorten the journey from the mainland to macau.