HONG KONG (Reuters) - Casinos in the world’s biggest gambling hub of Macau extended a one-year winning streak with monthly revenue rising 29 percent in July due to a resurgence in spending by wealthy punters and increased numbers of tourists.
The special administrative region of Macau is a former Portuguese colony and the only Chinese territory where casino gambling is legal. The industry is recovering from a more than two-year decline that coincided with a government campaign against ostentatiousness among public officials.
Gambling revenue reached 23 billion patacas ($2.86 billion) in July, government data showed on Tuesday. That compared with analyst estimates of 27 to 30 percent growth.
Macau’s overall market has grown over the past year, with new resorts increasing competition for casino operators such as Wynn Macau Ltd, MGM China Holdings Ltd, SJM Holdings Ltd, Sands China Ltd, Melco Resorts & Entertainment Ltd and Galaxy Entertainment Group Ltd.
Operators may also be impacted by tighter regulations regarding the flow of yuan into Macau implemented over the past six months, analysts have said.
The expansion of Macau’s Las Vegas-styled Cotai strip built on reclaimed land has drawn gamblers away from Macau’s peninsula, a 15-minute drive away and home to MGM Macau and SJM’s Lisboa casinos.
Both MGM and SJM, which have yet to open casinos on Cotai, will be at a disadvantage until their openings, analysts said. MGM is due to open at the end of the year and SJM has stated 2018, though construction of its Lisboa Palace has been stalled since June due to an accident.
But even on Cotai, where Sands has its gondola-filled Venetian casino and Eiffel tower replica, wooing customers has become tougher as wealthy customers become more picky on where they play, analysts said.
For junket operators who facilitate high-rollers by extending credit and collecting debts, the landscape has shifted with many shut out due partly to rising competition.
One of Macau’s top junket investors, Neptune Group, on Tuesday said it would record an impairment charge after one of its junket partners had its contract terminated by Sands China - the second partnership to be terminated with the firm. Sands declined to comment on the termination.
Ongoing infrastructure development, such as a new ferry terminal near Cotai which opened in June and a planned light rail service, are likely to help drive increasing numbers of visitors to the Cotai strip in future, analysts said.
In July, Macau saw the opening of the Hollywood-themed Roosevelt hotel which also includes a casino.
13 Holdings Ltd, which has planned an uber-luxury resort with a fleet of Rolls Royce phantoms and lifts that take guests directly to their suites, was scheduled to also open in July but said it was still trying to secure financing for the project.
Reporting by Farah Master; Editing by Christopher Cushing