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SJM Holdings Almost Doubling Casino Revenue In First Quarter

The Macau casino gambling industry is booming, there is no denying that fact. Over the past year, the casinos have seen some of the most dramatic revenue increases in the history of the industry anywhere in the world. The first quarter of 2011 was more of the same, as SJM Holdings, owned by Stanley Ho, nearly doubled their revenue from the same period in 2011.

Last year in the first quarter, SJM made HK $760 million. That was considered a successful quarter, but it was nothing compared to the HK$1.4 billion the company made in the first quarter this year. With the Chinese government easing visa restrictions, it has been nothing but good fortune for SJM and other gaming companies.

It is not only the revenue increase that SJM is enjoying, but also their stock is climbing. In the past year, SJM stock has risen over 250 percent. In recent months, the stock had been stagnant as the Ho family worked out control issues, but after the issues were resolved the company's stock jumped fifty percent.

Many gaming companies are enjoying the success of the casino industry boom in Macau. Several US companies have held initial public offerings on the Hong Kong market, and it has raised billions of dollars for the likes of Wynn Resorts and Las Vegas Sands. The companies have used their leverage in Macau to help stave off disaster in the US, with the economic recession of 2008 depleting their Las Vegas customer base.

"Macau has been instrumental not only in helping their own cause when it comes to the economy, but also the US' cause," said Gaming Analyst Steve Schwartz. "Expansion of the entire industry has been rampant, and Macau has been the model for much of that expansion. It is a model that may not be sustainable at this level of growth."

That is the concern of the Macau government. Officials have placed an emphasis on diversifying the Macau economy. Along with casino owners, the government has decided that there will be a halt to any new casino development that was not already in the works heading into this year.

Analysts had predicted an increase in the first quarter for SJM, but not the type increase that occurred. Most analysts had the year over year increase at around seventy-five percent, which is still a number that stands out in relation to casino industries that are struggling in other areas of the world.

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