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Neither Macau nor China made it to the 2010 World Cup Tournament but betting there is fierce and may be impacting Macau.

We figured the 2H of June would slow in Macau due to the strong holiday celebration in 1H.  However, while not exactly sluggish, volumes have slowed more than we thought.  As we pointed out yesterday, gaming revenues may increase 67% for the full month of June Y-o-Y versus our mid-month projection of 74-80%.

Our sources are indicating that there has been a significant increase in the volume of World Cup betting with the many black market bookies. These matches receive individual bets in the millions of HKD and the volumes involved are enormous. We expected some betting on the group stage matches but a real acceleration from the round of 16 onwards.  The fact that betting has already been high could indicate that Macau gaming revenue growth could slow even further in the coming weeks (final match is on July 11th) as wagering is channeled away from the Macau tables toward the illicit sports books.  There are fewer matches occurring now but with much more interest.  Volume is probably in the billions, and could be in the tens of billions. That cash exodus would have to have an impact on the Macau market, but obviously only a temporary one.

Remember, July is also the first month in 2010 facing a positive year over year comparison.