Annual casino revenue in Macau soared 58 percent in 2010

Casino revenue in Macau soared 58 percent in 2010 to a record 188.34 billion patacas (US$23.51 billion).

December gambling revenue jumped 66.4 percent to a record monthly high of 18.883 billion patacas, according to figures compiled by the Macau Gaming Inspection and Coordination Bureau.

The growth in revenue in 2010 contrasts with 10 percent growth in 2009 - even without the relaxation of visa restrictions on mainland Chinese visitors and calls from Beijing for diversification away from gambling - and will continue into 2011, driven by the strength of the Chinese economy and discretionary spending by affluent Chinese, but at a lesser pace.

“The absolute level of the market is massive so it’s hard to sustain that level of growth,” Aaron Fischer, CLSA's head of Asian gaming research, told Reuters.

Fischer expects gambling revenue to grow 20 percent this year and 25 percent in 2012. Janet Brashear of Bernstein research expects 17 percent growth this year but noted in a recent report that limits on new gambling table capacity, a reluctance to approve new casino developments and possible tighter regulations on the junket operators that run lucrative VIP rooms, could eat into profits.

“There could easily be a 10 percent swing in either direction,” he wrote. “Government and economic variables abound however, which could alter the growth rate dramatically in either direction.”