Macau’s gross gaming revenues nearly doubled in May compared to a year earlier according to unofficial data reported by the Portuguese news agency Lusa.
The preliminary figures suggest revenues for May reached 17 billion patacas (US$2.12 billion)-95% up on the May 2009 audited figures that reached 8.8 billion patacas.
The likely scale of the increase had already been flagged by a number of Hong Kong based gaming industry analysts including Aaron Fischer of CLSA Asia-Pacific Markets.
It follows a 70% year on year increase in the GGR in April and a 57% surge in the first quarter. The engine driving most of the growth is VIP baccarat played on credit by visitors from mainland China or Hong Kong. That credit is being guaranteed in turn by rising asset prices in China-especially property and stocks.
Whether this growth can be sustained commercially and politically in the medium to long term is an interesting question. The mechanism used to cool down Macau’s casino market in previous years has been a slow down by the mainland authorities in the issuance of visas for Macau under the Individual Visit Scheme.
Some analysts speculate that mainland officials have held off doing this again in order to show support for Macau’s recently appointed Chief Executive, Chui Sai On. Mr Chui only took up his post in December so may still be in an unofficial ‘honeymoon’ period, suggest the analysts.
China has already made efforts to cool down the general asset inflation that underpins gambling credit issuance, by limiting the amount of capital the country’s banks can lend to private citizens. So far these macro-economic measures don’t seem to have fed through to the gambling market.
Macau surpassed the Las Vegas Strip as the world’s biggest gambling hub in 2006. Bettors wagered a record 119 billion patacas ( US$14.88 billion) in Macau’s casinos last year, 9.7% higher than in 2008.
