November 1, 2010 / 10:27 AM / 9 years ago

UPDATE 1-Macau gambling revenue hits record in October

* Oct gambling revenue up 50 pct y/y to $2.37 bln

* May revise full-year estimate - CLSA (Adds details, analyst quote)

By Sui-Lee Wee

HONG KONG, Nov 1 (Reuters) - Macau’s casino revenues rose nearly 50 percent to a record high of 18.869 billion patacas ($2.37 billion) in October from a year earlier, putting it on track to beat full-year expectations.

For the past few years, strong double-digit casino revenue growth in tiny Macau, the world’s largest gambling market, has boosted the earnings of the enclave’s casino operators including Las Vegas Sands (LVS.N) and Galaxy Entertainment Group (0027.HK), which reported strong earnings last week.

Aaron Fischer, CLSA’s head of Asian gaming research, said casino stocks such as Melco Crown MPEL.O, Sands China (1928.HK) and Wynn Macau (1128.HK) would soar on the news.

He said he could revise up his full-year revenue estimate, based on the October number, which beat the previous record 17.1 billion patacas set in May, according to data from Macau’s Gaming Inspection and Coordination Bureau on Monday.

“There’s a general level of optimism in China that’s translated into an appetite for gaming,” Fischer said ,adding that this was due in part to the strong property and equity markets.

“At the same time, the individual operators are more willing to extend credit, so people are more willing to play.”

October is also a seasonally strong month because of the Golden Week holiday — a typically high travel period for the mainland Chinese gamblers, who flock to Macau because it is the only place in China where casino gambling is legal.

Casinos and junket operators — middlemen who bring wealthy clients to Macau’s gambling halls — are offering better credit terms to attract high-rollers, who make up two-thirds of Macau’s market.

Fischer had expected gambling revenue in Macau to rise 39 percent this year from a year earlier.

Macau’s six casino operators include U.S. giants Sands and Wynn Resorts (WYNN.O), along with home-grown players Galaxy and SJM Holdings (0880.HK) and joint ventures Melco Crown and a casino jointly operated by MGM Mirage (MGM.N). (Editing by Kim Coghill))

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