Casino revenues soar as mainland bank deposit rates turn negative

Baccarat tables appear to be offering a more attractive bet than the mainland's negative bank deposit rates, as high-rolling gamblers pushed Macau's casino revenues to a fresh record last month.

Casino revenue was boosted by the 'Golden Week' National Day holiday to an unprecedented 18.87 billion patacas, up 49.8 per cent from a year ago and 23.3 per cent from September, data released yesterday by the Gaming Inspection and Coordination Bureau shows.

That was 11 per cent better than Macau's previous record of 17.07 billion patacas set in May. Last month's haul was also more than four times greater than the US$567.98 million in revenue booked on the Las Vegas Strip in February, the US casino capital's best month so far this year.

As with the mainland and Hong Kong stock and property markets, Macau's casinos appear to have emerged as key beneficiaries of Beijing's aggressive stimulus measures.

The city's 33 licensed casinos have seen impressive growth this year as mainland money continues to pour on to the baccarat tables.

Record gambling revenues have been a bonanza for casino operators including SJM Holdings, Sands China and Melco International Development - whose shares all hit new 52-week highs yesterday. SJM's stock is up 177 per cent in the year to date.

Compared with putting money in the bank, stock or property markets, the game of baccarat - which accounts for nearly 90 per cent of all casino revenue in Macau - may not appear to offer the same prospect of a reasonable return on 'investment'. But real interest rates on mainland bank deposits, after adjusting for consumer price inflation, have been negative since February.