Macau back in the billions - Monday 21st of January 2013

James Packers Macau joint venture is under pressure to maintain its share of the worlds biggest gambling market, as the hub returns to the double-digit growth not seen since the global financial crisis took hold.

In the six months to December, the cash passing through Macau casinos rebounded with such strength, it surpassed the record highs of March 2008 when total quarterly revenue peaked at 30 billion patacas ($A4 billion).

The market then experienced a slump triggered by Chinas visa restrictions and the global financial crisis.

Revenue in the past three months grew 14 per cent to 36 billion patacas from 34 casinos across Macau.

Revenue in the final three months of the year grew 50 per cent year-on-year.

The figures were released last week by Macaus gaming regulator and give a snapshot of how the local market is faring and how the six concessionaires are competing.

In the three months to September, Melco Crown Entertainment had a 12.5 per cent share of the 32 billion patacas generated by the former Portuguese colonys casinos.

Investors will have to wait until February to find out if the company has been able to keep hold of its share amid increasing activity from its competitors and a rapid acceleration in overall market growth.

CLSA analysts Aaron Fischer and Huei Suen Ng last week slashed their fourth-quarter earnings estimate for Melco Crown from $US65 million ($A70 million) to $US6 million, arguing that earnings would be hurt as it moves to deal directly with junket operators, reducing the commission it pays them from 1.35 per cent to 1.25 per cent. The pair recommend selling the stock until the casinos operations improve.

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