- Title: CHINA: Macau gaming growth slows as government probes Sands.
- Date: 2nd August 2012
- Summary: MACAU, CHINA (FILE) (REUTERS) VARIOUS OF SANDS COTAI ENTRANCE VARIOUS OF SANDS CHAIRMAN, SHELDON ADLESON, AT OPENING CEREMONY VARIOUS OF ADELSON SPEAKING AT MEDIA CONFERENCE VARIOUS OF FORMER SANDS CASINO BY NIGHT
- Embargoed: 17th August 2012 13:00
- Location: China
- Country: China
- Topics: Business,Economy,Lifestyle
- Reuters ID: LVAF4A36B9HOXVWNA6S5Q9CG7IP7
- Story Text: Gambling revenue in Macau, the world's largest gambling market, inched up 1.5 percent in July from a year earlier, the slowest growth since the financial crisis in 2009 as a tropical storm reduced visitor numbers, compounding subdued demand from Chinese gamblers.
July's revenue was 24.58 billion patacas ($3.08 billion USD), though still ahead of analyst expectations and up from 23.3 billion patacas in June, government data showed on Wednesday (August 1).
Some analysts had forecast July growth to be flat or down 1 percent year-on-year, but Billy Ng, of Bank of America Merrill Lynch, said the results were in line with his low expectations for the month.
"I think definitely it's not a strong number compared to what we have been so used to, double digit or in some case 40, 50, 60 percent. But we're already kind of expecting that some low number will come out. Part of that's because last year, we had very high base. The other part, of course, we know the economy has slowed down, the gaming revenue run rates have been slowing down, and also very recently we have very severe typhoon hitting Hong Kong and Macau, and I think that caused a little bit of growth (slowdown) too. So at the end I think it's within our expectation but of course it's a pretty low expectation to start with," said Ng.
Gambling revenue growth this year was projected to reach 20 percent but more recent estimates have put the figure to be around 10 percent.
"Hopefully that's the case, we're kind of expecting that it's closer to the bottom but we are not saying we will see a very, very strong recovery either. Maybe we are looking at still single digit, or maybe in a good month, if last year the win rate was a bit low or a bit unlucky, we may see close to 10 or a bit above 10 percent growth. But from time to time, we may see low single digits or mid single digits and that's pretty much for the rest of the year," said Ng.
Located an hour from Hong Kong by high-speed ferry, the former Portuguese colony is the only place in China where casino-gambling is legal.
Macau, seen by many investors as a play on China's macro-economy, was one of the world's fastest-growing economies last year with gaming revenue reaching $33.5 billion, more than five times that of Las Vegas.
Yet Macau, China's specially administered territory, one-third the size of Manhattan, has lost some of its luster, with Hong Kong-listed shares of casino operators down 20 to 30 percent since the start of May.
Sands, the biggest casino operator in Macau by market value, announced on Wednesday it was under investigation by the Macau government after the company transferred documents linked to a wrongful dismissal case to the United States from Macau.
It is the latest twist in a saga that has become a firestorm for billionaire Sheldon Adelson, the casino mogul who owns casinos in Las Vegas, Macau and Singapore and is the most active donor in U.S. Republican candidate Mitt Romney's presidential campaign.
Adelson's lawyers are due to face an August 30 hearing in the United States, where District Court Judge Elizabeth Gonzales will decide whether Las Vegas Sands Corp withheld financial documents in a case in which the 78-year-old is accused of having personally approved of prostitution at the company's casino in China's special administrative region of Macau.
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