In 2006, when Macau's casino industry was growing quickly relative to the world’s best-known gaming city, Las Vegas, it was a big story. But today it is well accepted that Macau has won the race – or at least this leg of it.
Gaming revenues in Macau were four times those in Las Vegas last year, and there is no evidence that the global slowdown is having an impact on business. In fact, gaming revenues hit a record high of $3.1 billion in August this year.
“We are forecasting an average revenue growth of 17% over the next nine years, which is a very high number,” said Aaron Fischer, head of consumer and gaming research at CLSA. Speaking at the firm's annual Investors' Forum in Hong Kong last week, Fischer estimated that Macau will overtake the US as the largest gaming market in terms of gross gaming revenue by 2015.
Fischer believes that an increase in the number of hotel rooms will drive further growth. There is not enough accommodation in Macau and investment in both hotel rooms and infrastructure will result in strong growth, he said. Macau has 0.7 hotel rooms per thousand tourists compared to four rooms in Las Vegas, 2.4 in Singapore and 1.8 in Hong Kong.
On a per capita basis, people in America are spending more on gambling than the Chinese. Per-capita gaming spending in China was $25 last year, versus $188 in the US. Fischer expects China's per-capita spending to increase to $78 by 2020, while spending in the US will grow to $211.
