Macau Gaming Revenue is out of control

Quote: only1choice

Could it finally really be slowing down?

Quote:

when the city’s casinos were still under the four-decade monopoly of the gambling magnate Stanley Ho — triad murders, bombings and other attacks were so common that a senior police official once tried to reassure tourists by announcing that Macau had “professional killers who don’t miss their targets.”

Quote: rxwine

Ah yes, reassuring.

The New Yorker recently had a long piece that didn't make Macau sound too distant from that era.

Quote: Paradigm

Your high speed train updates seem like they would be a near term catalyst to increase visitation from Bejing and the north, but maybe all the folks that want to come to Macau from those regions are already flying. Do you think the train will increase visitation or simply give those already coming another mode to get to Macau?

Quote: HKrandom

I think reaching cities without an airport is very important. China has 305 cities with a population above 1,000,000 and nowhere near that number of airports so having a high speed train going directly to Macau would add a lot of convenience for people living in somewhat large cities that don't have access to a great infrastructure.

Quote: Paradigm

Paco, I guess I misinterpreted your post on the November 2012 completion of the train routes. I thought that as of November 2012, the final piece of the rail line from Bejing to Macau would be completed and that currently the completed train routes don't extend north from Macau all the way to Bejing, but will later this year. Did I miss something in what you were trying to explain?

Quote: EvenBob

Asian's are frequently syndicate bettors, they're not betting their own money. A group gets together a lot of money and sends the best player to make the bets, and trusted overseer's to watch and make sure everything is kosher. They do it in the States too, all the time.

Quote: pacomartin

October's numbers should be released by Friday.

34.8% Jan
22.3% Feb
24.4% Mar
21.9% Apr
7.3% May
12.2% Jun
1.5% Jul
5.5% Aug
12.3% Sept

Quote: pacomartin

As of today the Beijing-Guangzhou train construction is complete, test runs are being made and passenger service begins sometimes next month. The entire 1428 mile trip will take 8 hours, instead of the previous 20 hour trip a few years ago.
Guangzhou is still 70 miles from Macau, but even including this last transfer, Macau will now be considerably more convenient to hundreds of millions of people.

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.

Quote: AcesAndEights

Holy $h!#!!

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.

Quote: pacomartin

Quote: AcesAndEights

Holy $h!#!!

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.

Just looking at the two year growth, we see that December 2010 to December 2011 was the lowest increase for all of 2011. So naturally it was much easier to get a +19.6% increase from Dec 2011 to Dec 2012.

Mind you, it was still an all time record breaking month. But it is important not to be irrationally exuberant. The growth factors could easily return to single digits by next month.

On the other hand a 20 hour train trip was just reduced to 8 hours. That makes it much easier to come from Beijing for a 3 day break than before. If you sleep on a train you still have marathon 24 hours in Macau.

It's not just Beijing, but there are hundreds of millions of people within short commute along the rail line. They can all get to Macau in significantly less time.

Quote: FleaStiff

By the time things dampen in the Far East, Las Vegas will be rebounding too.

Quote: rxwine

Could they wait until some future date, and just take it all for themselvesl?

Quote: pacomartin

Gaming revenue for first 9 months of 2013 is 260,632 million Hong Dollars. That is roughly US$123 million per day, vs US$17.2 million per day for Las Vegas Strip.
Macau now has 7 times the Las Vegas strip (or 4 times the state of Nevada).

The rate of increase is still a phenomenal 20% so they should reach $1 billion per week shortly.

Quote: rxwine

I imagine it's the money laundering capital of the world now too.

Quote: A window on China: What an offshore gambling mecca reveals about business in China Dec 10th 2011 | MACAU | -The Economist

Many come to elude China's strict limits on the amount of yuan people can take out of the country. A government official who has embezzled state funds, for example, may arrange to gamble in Macau through a junket. When he arrives, his chips are waiting for him. When he cashes out, his winnings are paid in Hong Kong dollars, which he can stash in a bank in Hong Kong or take farther afield.

“There are many ways to launder money, more than we can think of,” says Davis Fong, an associate business professor at the University of Macau. Some bypass junkets and instead use pawnshops and other stores, where they buy an item with yuan and promptly sell it back for Macanese pataca or Hong Kong dollars—less, of course, a generous cut for the shopkeeper. No one can quantify how much money is laundered in Macau, but it'ssuch an obscene amount of money you would die, one resident avows.

Quote: pacomartin

Stanley Ho (age 91) who had the license for gambling in Macau exclusively for 40 years has always been considered to be a mobster. But with a net worth of $2 billion, he is also the richest man in Macau. Ho has 17 children born to four women. In November 2010, Ho was awarded the Grand Bauhinia Medal the highest under the Hong Kong honors and awards system, reserved for those making a lifelong and highly significant contribution to the well-being of Hong Kong.

In 2010 NJ requested the right to investigate MGM Resorts' dealing with Pansy Ho, Stanley Ho's designated heir. Rather than risk their investment in Macau MGM Resorts agreed to sell their interest in the Borgota in 3 years. As typical with casinos, they failed to find a buyer who was willing to pay what they asked. At the end of three years, they petitioned the board to allow them to keep their share.

I believe the re-licensing is still under review.

Quote: A window on China: What an offshore gambling mecca reveals about business in China Dec 10th 2011 | MACAU | -The Economist

Many come to elude China's strict limits on the amount of yuan people can take out of the country. A government official who has embezzled state funds, for example, may arrange to gamble in Macau through a junket. When he arrives, his chips are waiting for him. When he cashes out, his winnings are paid in Hong Kong dollars, which he can stash in a bank in Hong Kong or take farther afield.

“There are many ways to launder money, more than we can think of,” says Davis Fong, an associate business professor at the University of Macau. Some bypass junkets and instead use pawnshops and other stores, where they buy an item with yuan and promptly sell it back for Macanese pataca or Hong Kong dollars—less, of course, a generous cut for the shopkeeper. No one can quantify how much money is laundered in Macau, but it'ssuch an obscene amount of money you would die, one resident avows.

Quote: Tomspur

Next time you head out to Vegas try to quantify those numbers.

Quote:

Junket operators that connect China's wealthy punters to Macau's casinos are waiting as long as a year for gamblers to repay billions of dollars of loans, crippling the business model of an industry that sustains the world's biggest casino center.

These businesses, which lend to high rollers and operate private gambling rooms, normally collect within 30 days and charge interest rates as high as 3 percent per month on overdue balances, according to Macau-based junket consultant Tony Tong.

Now the junkets are on the hook for a surge in bad debts as China's economic slowdown and a crackdown on corruption chase some VIP gamblers away. With little access to credit and slow repayments, the money isn't flowing.

"The business model looks near-broken," said Philip Tulk, an analyst with Standard Chartered in Hong Kong.

Quote: nickolay411

I'll be there later this week. I heard from a friend that it's quite hard to find a minimum of 300 HKD even on the weekdays. That's roughly 38 dollars.

As far as big whale action, I've also heard the Government in Beijing is now making it pretty difficult for government officials to get to Macau. I'm not sure we will see a revenue dip though...

Quote: nickolay411

Not just defaulting, but most of the whales were corrupt government officials who are now on a strict watch on entering macau so repeat whale business has totally dropped. Revenue is stabilizing though even without the whales because of the influx of recording breaking tourists and regular players... but revenues could continue to drop, while Macau builds itself a destination resort with entertainment.

Also junket operators are closing as they cant recoup most of the lost money, this will change how the casinos target their valuable players. We might see more traditional host relationships with players in the future as this right now is very non existent.

really i dunno :P