The predictions came true. Macau posted another new record high revenue mark in May, the fourth consecutive month it has done so. Gambling revenue hit MOP24.31b (US$3.03b), up from MOP20.51b in April, and up 42% over the May 2010 tally. This month’s numbers were spurred on by the week-long national holiday at the beginning of May, and the opening of Galaxy Macau on May 15. The numbers will be music to the ears of Pansy Ho, whose $1.5b MGM China IPO gets underway this Friday.
While everyone else dances in the money shower, RBS gaming analyst Philip Tulk expects he won’t need quite as big an umbrella over the next few months. Tulk told Reuters that he “would be surprised if gaming revenue growth reaches this level until maybe October. Five out of the last six years we have seen a decline in June versus May.” Whether the novelty of Galaxy Macau will be enough to reverse this trend remains to be seen.
“The atmosphere was a total irrational exuberance; it truly was. There was a feeling that there was no end to the good times and that the money would never end.” In case you were wondering, those words were not describing Macau, but Atlantic City. Speaking to the Associated Press, Robert Griffin, CEO of Trump Entertainment Resorts, remembered the halcyon days of the 1980s and 1990s, when boardwalk casinos were the only gambling option on the eastern seaboard of the United States. Revenues reached a peak of $5.2b in 2006, then everything went to hell.
Atlantic City’s downfall is attributed not just to competition opening in neighboring states, but the unwillingness of AC’s casino bosses to expand beyond a pure gambling model, something Las Vegas had successfully addressed long before their own situation became critical. Actually, the pure gambling model sounds a lot like Macau nowadays (although newer operations like Galaxy Macau are attempting to change that). Macau is also facing regional competition from Singapore, with Vietnam, Taiwan and others looking to hop on board the casino train in the near future. So ten years from now, will we be reading the fond reminisces of Pansy Ho, talking about the good old days, before Macau went to hell?
Not bloody likely. Comparing America’s northeastern seaboard to Southeast Asia is a bit like comparing your penis to an elephant’s. (We don’t recommend this, even if your name is Dirk Diggler.) The difference in market size is exponential. What’s more, the burgeoning middle classes of China and surrounding nations have yet to be tapped in any significant way, and unlike their western counterparts, they don’t have any moral qualms about gambling to overcome. So even if Macau fails to set a new revenue record for the next month or so, remember that even Dirk Diggler had his refractory periods.
