Gambling in Macau Continues to Boom
Gambling revenues continue to soar in Macau, breaking the $3 billion mark in May for the first time ever.
According to a report released by Macau gaming authorities on June 1st, Macau's $3 billion haul for the month of May was its best month ever, eclipsing the previous record in April by nearly 20% and up 42% over the same period in May 2010.
Macau's revenues for May were boosted by the opening of its latest mega-casino when the Galaxy Macau (owned by Galaxy Entertainment) opened its doors on May 15th on the Cotai Strip.
The Galaxy Macau joins existing casinos operated in Macau by Las Vegas Sands, Wynn Resorts and MGM Resorts, which have all brought the same Vegas-style experience of huge casinos with hotels, shopping and entertainment to Macau.
Macau generated nearly $23.5 billion in gambling revenues in 2010 (with the bulk of it coming from slot machines and popular table games such as baccarat), and many analysts expect an increase of about 30% in 2011.
Macau passed Las Vegas long ago as far as total annual revenues from gambling and shows no signs of looking back.
Las Vegas continues to struggle with a nearly two-year long recession in the US, although May showed some signs of life for the Vegas market with small gains for some operators.
While occupancy rates are climbing for Vegas casinos the market as a whole is still trying to cope with the oversupply from a glut of building during the US property boom in the early and mid 2000s.
Many Vegas operators are looking to Asia for future growth, including Las Vegas Sands which now operates casinos in both Macau and Singapore.
Growth will inevitably slow at some point in Macau and Singapore but the prospects are still bright as the market is still relatively uncrowded when compared to Vegas.
One wild card, however, is that Macau's rapid growth has not gone unnoticed by the Chinese government, which has voiced concern about the money that might be leaving Macau and going to foreign-owned companies such as Las Vegas Sands, Wynn, and MGM.
China has raised the possibility of imposing travel restrictions to Macau or other measures that might restrict future revenues and growth.
Gambling growth may also slow slightly in Macau and Singapore as more online casinos become available in those markets, as restrictive laws and other policies have made it hard for online operators to expand in Asia.
That may change in the future, however, as some operators such as 888 have seen recent success and begun offering country-specific portals and games for countries including Japan and China.
Gambling revenues continue to soar in Macau based on the latest numbers released by the government for July, with revenues up 48% compared to July 2010. Many predicted success for Macau as far as offering gamblers in China easy access to popular casino games such as baccarat and slots but few predicted the runaway growth that has resulted.
The former Portugese colony has remade itself into a gambling mecca that long ago surpassed Las Vegas as far as total gambling revenues, with many US casinos such as Wynn, the Venetian, and MGM Grand opening mega hotel/casinos in Macau. Macau surpassed Vegas back in 2006 and is on pace to do fives times the revenue of the Las Vegas Strip in 2011.
Overall gambling revenues for Macau in July topped $3 billion, shrugging off any effects of China's move to raise interest rates five times in the last nine months in a bid to cool down its racing economy.
Local officials in Macau have expressed their own worries about the explosive growth of gambling in Macau, fearing that it may lead to a boom-bust cycle that isn't sustainable in the long run.
The success of Macau has been a mixed blessing in the eyes of the Chinese government, as many of the profits have gone to US companies such as Las Vegas Sands, Wynn, and MGM, as well as to Hong Kong-based Galaxy Entertainment, SJM Holdings, and Melco International Development.
Macau's record numbers have turned it into an important source of profits and growth for many of the global gambling firms that operate there, with traditional markets such as Las Vegas still looking to rebound from a recession and struggling economies.