HONG KONG- Macau raked in US$45 billion (S$57 billion) in gambling revenue in 2013, 18.6 per cent more than in 2012, as the world's biggest and China's only casino hub continued to blaze ahead of rival gaming destinations.
Macau, which earns seven times more than Las Vegas, has seen revenue soar in recent years thanks to its proximity to vast numbers of increasingly wealthy Chinese dazzled by fortress-sized resorts such as Sands China Ltd's Venetian Macao and Galaxy Entertainment Group Ltd's Galaxy Macau.
Improved access to the region boosted revenue last year from China's growing middle class, offsetting slowing VIP growth brought about in part by the government in Beijing's campaign against conspicuous spending by public officers.
In December, revenue grew 18.5 per cent from a year earlier to 33.5 billion patacas (US$4.19 billion) thanks to a rise in holiday-season visitors. That compared with the 13 per cent to 17 per cent estimates of six analysts.
Those analysts see 2014 growth of 10 per cent to 14 per cent partly because there will not be any new casino openings until 2015, meaning there will be no new gaming capacity or additional hotel rooms to keep pace with growth.
Projects under construction are subject to a new ruling whereby the local government allocates gaming tables based on the inclusion of non-gaming features. The former Portuguese colony is trying to diversify its sources of revenue, over 80 per cent of which comes from the gambling industry.
Casino mogul Steve Wynn, through his Wynn Macau Ltd unit, is building a US$4 billion floral-themed resort featuring an artificial lake and dancing fountains like the Bellagio in Las Vegas. US billionaire Sheldon Adelson of Sands China is building a miniature Eiffel Tower dubbed the Parisian which will have a mall and convention space.
Revenue growth of big-spending VIPs slowed last year as the central government clamped down on ostentatiousness among officials. At the same time, improved infrastructure has helped more of the middle class reach Macau.
The growth of the so-called premium mass segment, where customers spend anywhere from a few thousand yuan to under one million yuan ($165,200), is helping casino operators such as Melco Crown Entertainment Ltd generate double digit revenue.
China's expanding high-speed train network and projects such as a 38 billion yuan bridge connecting Hong Kong, Macau and Zhuhai on the mainland are reducing travelling times to Macau.
The development of neighbouring Hengqin island - which is also part of mainland China - is also likely to boost visitors to Macau.
Only around 4 per cent of Chinese - or about 52 million people - have visited Macau, casino executives and industry watchers estimate, leaving ample room for growth.
This outlook helped Macau's Hong Kong-listed gaming stocks surge 42 per cent to 132 per cent last year, while the benchmark Hang Seng Index rose 3 per cent.
"Macau is expensive... but it's hard to push the 'Sell'button," wrote brokerage Macquarie in its most recent gaming report.