Macau's house take grows 23% to $8.9b

Macau's house take grows 23% to $8.9b, by Lisa Murray and Bloomberg - 24th January 2007
(Credit: The Sydney Morning Herald / Bloomberg)

Macau's total gaming revenue surged 23 per cent last year to almost $US7 billion ($8.9 billion), beating analyst expectations and boosting the outlook for Publishing and Broadcasting Ltd, which is building three casinos in the Chinese city.

Shares in PBL jumped 25c yesterday to $20.35 after the figures were released by Macau's gaming regulator.

Macau is expected to trump Las Vegas as the world's biggest gaming destination in revenue terms. Figures for 2006 have not yet been released by the Las Vegas gambling industry but most analysts expect they will confirm Macau has taken out the top spot.

Goldman Sachs JBWere analysts said the increase in Macau's VIP gaming revenue of 17 per cent to $US4.2 billion was above expectations. That's good news for PBL as its first casino, Crown Macau, will be pitched to the VIP market. The casino development, which includes a 36-storey tower, 220 gaming tables, more than 500 machines and a luxury hotel, is to open in the middle of this year.

All up, PBL along with its joint venture partner Melco International, is spending $US3.3 billion on the three casino developments. Its City of Dreams development on the Cotai strip, which includes an underwater casino, is expected to open at the end of 2008. A third casino is to open on the Macau Peninsula in mid-2009.

Analysts have been cautious when it comes to valuing the Melco-PBL joint venture because none of the casinos are going yet.

Macau's gaming revenue started to surge in 2004, when Sheldon Adelson's Las Vegas Sands and Galaxy Casino ended the four-decade monopoly of Hong Kong billionaire Stanley Ho. Foreign investors are staking $US20 billion on making the city, a former Portuguese colony that's now a special administrative region of China, into the gambling capital of Asia.

By the end of 2006, Macau had a total of 24 casinos operating 2762 gaming tables, according to Macau's Gaming Inspection and Coordination Bureau web site.

The city attracted 22 million visitors in 2006, an increase of 17 per cent from 2005, according to statistics released on January 17 by Joao Manuel Costa Antunes, director of Macau's tourism office.

In total, 2.2 billion people live within five hours' flying time of Macau, according to CLSA Asia-Pacific Markets, compared with 410 million in the same radius of Las Vegas. Macau now earns 70 per cent of its revenue from casino taxes and its economy has doubled in four years to $US12 billion.

PBL is also waiting on news out of London about which region has been chosen for Britain's first ever Las Vegas-style supercasino.

Aspers, the joint venture between PBL and British casino heir Damian Aspinall, has been chosen as the preferred partner for the Cardiff council in Wales. However, Blackpool and London are the front runners for the supercasino licence.