The Macau Gaming Inspection and Coordination Bureau (DICJ) recently released its tally of aggregate gambling winnings of the Chinese SAR’s casinos during the holiday month of October. The results, in MOP millions, are as follows:
| Monthly Gross Revenue from Games of Fortune in 2013 and 2012 | ||||||||||
| Monthly Gross Revenue | Accumulated Gross Revenue | |||||||||
| 2013 | 2012 | Variance | 2013 | 2012 | Variance | |||||
| Jan | 26,864 | 25,040 | +7.3% | 26,864 | 25,040 | +7.3% | ||||
| Feb | 27,084 | 24,286 | +11.5% | 53,948 | 49,325 | +9.4% | ||||
| Mar | 31,336 | 24,989 | +25.4% | 85,284 | 74,314 | +14.8% | ||||
| Apr | 28,305 | 25,003 | +13.2% | 113,589 | 99,317 | +14.4% | ||||
| May | 29,589 | 26,078 | +13.5% | 143,178 | 125,395 | +14.2% | ||||
| Jun | 28,269 | 23,334 | +21.1% | 171,447 | 148,729 | +15.3% | ||||
| Jul | 29,485 | 24,579 | +20.0% | 200,932 | 173,308 | +15.9% | ||||
| Aug | 30,737 | 26,136 | +17.6% | 231,670 | 199,444 | +16.2% | ||||
| Sept | 28,963 | 23,866 | +21.4% | 260,632 | 223,310 | +16.7% | ||||
| Oct | 36,477 | 27,700 | +31.7% | 297,109 | 251,011 | +18.4% | ||||
Source: Macau DICJ.
The monthly “win” is an all-time record for Macau, and, in my view, stunningly good.
Two factors appear to be at work:
–the expansion of casino capacity and the parallel development of non-gambling entertainment (at the insistence of the Macau government) in the Cotai region is broadening the appeal of Macau as a tourist destination and drawing in a younger, “merely” affluent crowd in large numbers, and
–the upturn in the Chinese economy is prompting the return of increasing numbers of the enormously wealthy VIP baccarat players who have until now formed the backbone of Macau’s casino industry.
What I find interesting is that the Hong Kong-traded Macau casino stocks have been selling off on this good news. This is partly, I think, because the stocks have been extremely good performers over the first three quarters of the year, as it became clearer that the Chinese economy was beginning to rebound. The fact that more speculative and less skillful operators in the Macau market have been leading the pack had already been suggesting that the recent run was getting a bit long in the tooth. In addition, however, I think the pullback we are seeing also is in line with an emerging mood of caution I see building in stock markets around the world.
I don’t think anything is wrong, either with Macau gambling or with the strongest operators. A while ago, I trimmed my casino holdings a bit, based solely on position size. Others may be doing the same, only timing their move a bit better than I did. I expect that as Macau continues to exhibit strong growth in gambling win over the coming months, the stocks will take up their outperforming ways again, with Galaxy Entertainment, Sands China and possibly Wynn Macau in the vanguard.