August was a good month for Macau casinos; in fact, it was a record month. With US.5 billion in gross gaming revenues, it was the highest-ever monthly revenue and more than 17 percent higher than the same period last year. It was the second month where revenue increased year-over-year, leading some analysts to predict that the long downturn that began in early 2008 is over.
The revenue report caused several Macau-based stocks to soar. Shares of Galaxy Entertainment Group rose 6.4 percent, while Melco Entertainment rose as much as 7.1 percent. Wynn Resorts and Las Vegas Sands also surged on the report.
Ironically, the overall Macau economy continued its decline, with the SAR’s GDP shrinking 13.7 percent in the second quarter.
Some of the growth may be attributable to two new casinos that opened in June, Melco Crown’s City of Dreams and Hotel Lan Kwai Fong Macau, bringing the city’s total number of casinos to more than 30.
One of the major beneficiaries in August was MGM Mirage, which lifted its market share for its MGM Grand Macau from 8 percent to 11 percent, vaulting over Galaxy Entertainment to escape last place.
MGM Mirage Chairman and CEO James Murren said the company has made many changes in the operation of the casino and is just starting to fulfill its potential. He said the company overestimated the appeal of high-end restaurants and hotel rooms to Chinese gamblers.
“We put a lot of money in public spaces, a beautiful conservatory, and restaurants and rooms, and they haven’t embraced that to make it economically viable,” Murren said. “Where we compete best is in the high-end resort experience, but we could not afford to neglect the fact that, regardless of what we want, customers are going to do what they want. That was one of the philosophical changes we needed to make.”
The company has changed management, increased marketing and re-designed casino areas to make them more attractive to gamblers, says Murren.