The glitzy casinos of Macau, a gambler’s paradise just off mainland China, saw a surge in gambling revenue over the week-long Chinese national holiday from Oct. 1 to Oct. 7 known as Golden Week, according to a Citigroup Inc. (NYSE:C) research note.
Daily gross gambling revenues for the first six days of October were up 30 percent from the year before. In total, gamblers spent about 10.6 billion Macau patacas ($1.32 billion) in one week.
On a daily basis, that’s 85 percent higher than daily revenues during the first nine months of the year.
Revenue is streaming in so quickly that Macau’s more than 30 casinos can’t even install extra game tables fast enough.
“The strong Golden Week figures suggest that all six casino operators have the capacity to generate more GGR [gross gaming revenue] with the same 5,750 tables in Macau today,” wrote Citi analysts.
About 170 new tables are expected to be added annually at Macau’s casinos, or 3 percent of today’s table setup. Revenues are forecast to grow by 15 percent in fiscal year 2014, or five times as fast, surpassing any theoretical “bottleneck” imposed by table growth.
Macau’s daily cash inflows have improved steadily over the past three years, from daily revenues of less than 800 million patacas in 2011 to just under 1 billion patacas daily in 2013, according to a Citi analysis.
If gamblers spend in October like they did earlier in the year, casinos will rake in more revenue in October 2013 than they ever have, a full 10 percent higher than the 31.3 billion-pataca all-time monthly record set in March 2013.
Gross gaming revenue for Macau is up 20 percent in the third quarter from the year-ago period.
Macau’s solid performance contrasts with sluggishness in rival Asian gambling hub Singapore, where weaker Southeast Asian economics and currencies may keep gamblers at home, wrote Citi analysts.
In wider Southeast Asia, Cambodia and the Philippines are bright spots for casino expansion, with earlier Citi research showing the highest percentage revenue growth in the two countries, beating even Macau’s boom. The Philippines looks on track to double Macau’s revenue growth in 2013 and 2014, in percentage terms.