Wednesday, March 24, 2010

Asia Pacific Tax Revenues Increase, by Greg Tingle - 23rd March 2010

Our friends in the Asia Pacific, Macau, to be specific, are riding a wave of success.

Media Man and Gambling911 have learned that Australia's James Packer and Asian casino king, Stanley Ho (and the Ho family), have rejuvenated the Macau casino and gaming landscape in recent months. Packer, Ho's and the Macau tax office are laughing all the way to the bank as their fortunes have turned for the better.

Now, the number crunching and vital statistics, to back up the bold claims. A word of warning, if your not a numbers person or mathematically inclined you might like to switch off for just a couple of paragraphs.

Direct gaming tax revenues in January - February, rose 54 percent to MOP 9.26 billion, the Financial Services Bureau (DSF) announced. Meanwhile, analysts said casino earnings may set a new record in March and shares continue to go up.

Direct gaming tax receipts accounted for 86.55 percent of total government revenue. Total government revenue reached MOP 10.7 billion, a year-on-year increase of 45.8 percent. Government expenditure fell by 46.5 percent, to MOP 1.26 million.

Macau’s public finances confounded the international crisis last year as total public revenue in 2009 amounted to MOP 57.64 billion, an increase of 0.014 percent or MOP 8.1 million over the previous year.

Analysts at Citi said Macau gaming is on pace for a record month in March. According to the firm’s note, checks show gaming revenue in Macau has reached around MOP 7.5 billion in the first 16 days of March, up 58 percent from last year.

Year-to-date, gaming revenue is up 66 percent from last year the firm notes. If the current run-rate continues, Macau’s gaming revenue could reach a new high at around MOP 14.5 billion.

The company said SJM is the only winner in terms of market share gains for the month. In addition, it appears that Wynn, MGM and Melco-Crown have lost one percentage point each in market share in March so far versus February.

Moreover, Gabriel Chan, an analyst at Credit Suisse Group AG in Hong Kong, said that gaming stocks "are heading into a major substantial re-rating over the next couple of months".

"Over the past couple of months, we have seen, especially for Macau, month after month of much better than expected gaming revenue numbers, but share prices hardly reacted to that good news," he told our friends at Bloomberg.

"We have to adjust expectations a lot higher to accommodate much stronger growth – we are entering a stage where no one can ignore the growth anymore," Chan said. In his view, "valuation has not fully priced in the growth potential yet". You can just envisage Mr Packer and Mr Ho smiling as they read this. James will be jumping off his luxury liner (again) after getting his daily dose of Gambling911 news.

MGM are about to further shake up the region, pulling out of Atlantic City due to some friendly advise (diplomatic not) from the U.S government. MGM's elected to follow the Ho's money trail to Macau - Macao parts. MGM's expecting a warm welcome, unlike the public besmirching they endured while on U.S soil, in downtown A.C.

Media Man's little investment in an .Asia domain name, adding to the stable of 20 something internet portals and domains, not to mention the Crown Limited shares, have certainly paid dividends to date. The media and gaming industry awaits MM's next move!

Media Man and Gambling911 publicly congratulate Crown's James Packer on his "comeback of the decade" and Asian casino king, Stanley Ho, on his heath recovery.

May the power and good luck of the friendly dragon be with you whether City of Dreams or online casinos take your fancy.

*Greg Tingle is a special contributor for Gambling911

*Media Man is primarily a media, publicity and internet portal development company

*The writer owns shares in Crown Limited and is currently evaluating a shares purchase in a number of Macau based casinos

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