Macau's October gambling revenue surged 50% from a year earlier, setting a record monthly high and beating analyst expectations as patronage surged during the Chinese Golden Week holidays at the beginning of the month.

Stunning gambling revenue growth in the territory since the second half of 2009, after recovering from the global economic downturn, a swine flu outbreak and mainland China visa restrictions, has fuelled record-breaking results at casino operators such as Las Vegas Sands Corp. (LVS) unit Sands China Ltd. (1928.HK) and Galaxy Entertainment Group Ltd. (0027.HK), which reported third-quarter operating data last week.

October revenue totaled MOP18.87 billion (US$2.36 billion), up sharply from MOP12.60 billion a year earlier and September's MOP15.30 billion, according to data from Macau's Gaming Inspection and Coordination Bureau.

CLSA analyst Aaron Fischer wrote in a note Monday that "consensus and our estimates for November and December are too low" and that he expected stocks to react positively to the data. CLSA had forecasted October's revenue would have risen 43% on year, and Wells Fargo had tipped a 44.5% jump.

October's total surpassed the last record, hit in May this year, when revenue reached MOP17.1 billion. The figure was also boosted by the fact that October had five weekends. Gambling revenue in the January-October period has risen 59% from a year earlier to MOP152.11 billion.

JP Morgan analyst Kenneth Fong wrote in a Monday report gambling revenue was likely to slow in November and December due to seasonality and that if it were to exceed MOP16 billion per month the rest of the year, that could "positively surprise the market."

The strong numbers bolstered Sterne, Agee & Leach's view that the opening of casinos in Singapore earlier this year hasn't dented business in Macau. "While we believe October will show a small boost in [mainland] China visitation to Singapore due to the Golden week holiday, we continue to believe Singapore has had little impact on Macau, demonstrated by Macau [gross gambling revenue] results to date," wrote analyst David Bain in a Monday note.

Among Macau's six casino license-holders, tycoon Stanley Ho's SJM Holdings Ltd. (0880.HK) continued to lead the market with a share of 33% followed by Sands China (1928.HK) with 19%, according to the JP Morgan report. SJM gained two percentage points from the previous month while Sands held steady.

Melco Crown Entertainment Ltd. (MPEL), co-chaired by James Packer and Lawrence Ho, saw its market share slip to 14% from 16% in September. Wynn Resorts Ltd. unit Wynn Macau Ltd. (1128.HK) saw a rise to just under 14% compared with the 12% it garnered in the previous month, according to the report. "After falling for three consecutive months, Wynn Macau's market share bounced back as 'win-rate' normalized," wrote Fong.

MGM Macau, a joint venture between Pansy Ho and MGM Resorts International (MGM), rose to fifth place at 11%, up from 10%, and Galaxy Entertainment's share fell to 10% in October from 12% in September, the report said.

-By Kate O'Keeffe, Dow Jones Newswires; 852-2802-7002; kathryn.okeeffe@dowjones.com
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