Slumping Macau casino stocks are worth the gamble, some analysts say

Macau casino stocks have lost as much as half their value over the past year as Beijing's anti-graft crackdown scares away wealthy VIP punters, but some investors say their faith in long-term gambling demand from the mainland remains unshaken.

Casino revenues for the world's biggest gambling hub were down nearly 40 per cent last month from a year earlier, the 11th straight month of weakness. Moguls like Wynn Resorts' Steve Wynn and Las Vegas Sands' Sheldon Adelson have noted the unprecedented nature of the decline and an uncertain outlook.

High rollers now account for around 60 per cent of gambling revenue, down from 80 per cent two years ago. Among Hong Kong-listed stocks, those hit hardest include SJM Holdings, which has fallen 54 per cent over the past year, and Wynn Macau has tumbled 45 per cent.

But those taking a long-term view note that only 2 per cent of the nation's 1.4 billion people have visited Macau, while the extension of the high-speed rail network will slash travel times.

"What is the worst that could happen? Stocks go down before they go up. But they will go up. We are preparing for a 100 per cent increase in share prices within the next three years," said Matthew Ossolinski, chairman of Ossolinski Holdings, a global emerging markets fund that invests in gaming companies.

Macau's capacity expansion will continue. Melco Crown Entertainment is set to open a film-themed casino resort this year. Another three casinos will open next year.