March 3, 2014 / 5:10 AM / 4 years ago

UPDATE 1-Macau gambling revenue surges record 40 pct in February

HONG KONG, March 3 (Reuters) - China’s gambling hub Macau raked in a record $4.8 billion in gaming revenues for the month of February, far above analyst expectations, with strong spending from wealthy punters during and after a week-long national holiday.

Gambling revenue growth in Macau, a special administrative region that is the only place in China where casinos are allowed, soared 40 percent to 38 billion patacas ($4.75 billion), far ahead of analyst estimates of growth between 29-35 percent.

A Portuguese colony until 1999, Macau earns the equivalent of Las Vegas’s annual haul in less than two months. February’s $4.8 billion figure compares to Singapore’s 2013 annual haul of $6 billion and Las Vegas’s $6.5 billion.

While 2013 saw rapid gambling revenue growth, analysts have relatively tempered expectations for the coming year due to macro economic uncertainties in China and the potential for slower credit growth, which could impact the high-roller VIP segment.

February’s record comes after muted growth in January when revenues came in at 28.7 billion patacas with Chinese punters putting off their trips until the holiday period.

Growth of the VIP segment, mainly consisting of mainland gamblers who spend more than 1 million yuan ($162,700) per bet, is expected to slow to around 5-10 percent annually due to higher penetration of China’s growing middle class, referred to by casino operators as “mass market visitors”.

Analysts estimate mass market growth is likely to range between 25-30 percent this year.

While no new casinos are set to open in Macau this year, the city will see the opening of eight new resorts over the next three years.

Low penetration and improving infrastructure developments that will shorten the journey from the mainland to Macau, located on China’s southern coast, are likely to continue to drive visitation and further demand for gambling, analysts say.

Macau’s expansion comes as rival gaming destinations from the Philippines to Russia set up casino resorts to lure wealthy Asian punters.

Local Macau authorities and top officials in Beijing are pushing to diversify Macau from its reliance on gaming by expanding entertainment, retail and convention facilities. The moves are intended to attract a wider visitor base who come to Macau for leisure and tourism rather than gambling.

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