Macau's gambling revenue continued to grow strongly in January boosted by robust demand from mainland Chinese visitors, despite efforts by the government to stabilize the surging market.

Gambling revenue for the month rose 33% to MOP18.57 billion (US$2.31 billion) from MOP13.94 billion a year earlier, according to data from Macau's Gaming Inspection and Coordination Bureau. The rate of growth was lower than the 58% jump in full-year 2010 because of a high comparison base, but the amount was still the third highest on record, after December and October last year.

Analysts had expected revenue to drop from December's all-time high due to gambling activity typically softening ahead of the Lunar New Year holiday, a week-long break for mainland Chinese that starts Wednesday this year.

Still, they expect a very strong February. RBS analyst Philip Tulk forecast gambling revenue for the month at MOP20.5 billion, boosted by an influx of Chinese gamblers over the holiday period.

Macau's gambling revenue has staged a dramatic turnaround since the end of 2009, after the city was hit by the global economic downturn, a swine flu outbreak and mainland China visa restrictions in the first half of that year.

Gambling mogul Stanley Ho, currently embroiled in a bitter dispute with family members over control of his casino empire, held a decades-long monopoly over Macau's gambling market until 2002, when the industry was opened up to competitors such as Las Vegas Sands Corp. and Wynn Resorts Ltd. of the U.S.

However, Ho's company, SJM Holdings Ltd. (0880.HK), remains the largest operator in Macau in terms of revenue, consistently accounting for more than 30% of the market, which generated four times the revenue of the Las Vegas Strip in 2010.

The ailing 89-year-old tycoon is seeking to regain ownership of a company that is the biggest shareholder of SJM Holdings' parent, according to a lawyer claiming to represent him. The lawyer, Gordon Oldham, has said Ho believed his second and third families had "hijacked" his stake in the gambling empire he built.

Macau's gambling revenue has continued to grow rapidly despite efforts by the government to cool the industry amid calls from Beijing for the city to diversify its economy away from the lucrative casino business.

In March, the Macau government said it would put a cap on the number of gambling tables in the territory, complicating casino operators' expansion plans.

In addition, the local government's tight restrictions on foreign labor has stalled the development of Sands China Ltd.'s (1928.HK) massive casino expansion project in the Cotai area. The company had aimed for the expansion to be operational in the third quarter of 2011, but analysts now expect a mid-2012 launch at the earliest.

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