Macau gambling revenue hits record high in October

Reuters

* Growth of 31.7 pct edges out high end of estimates

* Golden Week holiday sees 10.7 pct increase in visitors

HONG KONG, Nov 1 (Reuters) - Gambling revenue in thesouthern Chinese territory of Macau surged 31.7 percent to arecord high in October year-on-year, after a week-long nationalholiday boosted visitation from big-spending mainland gamblerskeen to punt in the country's only legal casino hub.

October's revenue at 36.48 billion patacas ($4.6 billion)was the highest monthly figure on record, according togovernment data released on Friday. Analysts had forecastOctober growth in the world's biggest gambling market, to be up27-30 percent.

A former Portuguese colony, Macau is located a one-hourferry ride from the financial centre of Hong Kong. A specialadministrative region like Hong Kong, Macau is one of theworld's fastest-growing economies due to its lucrative casinoindustry.

China's Golden Week national holiday, which took place inthe first week of October, saw a 10.7 percent increase invisitors from mainland China compared to a year earlier. Macau'sgambling revenues are highly dependent on the domestic marketwith more than two-thirds of tourists coming from the mainland.Visitor arrivals totalled 7.76 million for the third quarter of2013.

The rise in revenues is largely attributed to the growth of"mass-market" visitors made up of China's growing middle classwho are visiting Macau in greater numbers and spending more thanever before.

Macau's 35 casinos have typically relied on VIP "whale"gamblers to support revenue growth, but a crackdown oncorruption by Beijing has seen the growth of VIP numbers fail tomatch that of mass market, which is growing from a much lowerbase.

The six licensed casino operators, Sands China,Wynn Macau, Melco Crown, GalaxyEntertainment, MGM China are all targetingthe "premium mass" segment, made up of affluent gamblers who betanywhere from 10,000 yuan ($1,600) to under 1 million yuan. Thesector is more stable and provides higher profitability than VIPgamblers.

The lack of hotel rooms in Macau is a key constraint interms of pushing revenue growth higher casino executives say.While eight resorts are in the works along with additionalhotels, new capacity is unlikely to come online before the endof 2014.

Hotels reported close to full occupancy for the holidayperiod while local media said mainland visitors stayed atcampsites due to exorbitant room rates. The cheapest five-stardeluxe room on Macau's Las Vegas style Cotai strip was 5,888patacas (US$737) per night.

Infrastructure developments in the coming years are expectedto help lift the number of visitors to Macau. Currently mosttourists come from Guangdong and other nearby provinces.

A bridge joining Hong Kong, Zhuhai and Macau is set to openby 2016, while expanded intercity rail links will shorten thetime of travel from China's northern cities to the gamblingcentre.

Plans are also in place to upgrade Macau'scapacity-constrained ferry terminals and international airport.

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