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Macau casino operator Galaxy Entertainment said the Chinese gambling hub is transitioning to a “sustainable market recovery” lead by the mass market as it reported first quarter earnings ahead of analysts’s estimates.

Galaxy reported earnings before interest, taxes, depreciation and amortisation for the three months to March jumped 31 per cent compared to the same period last year to HK$3.2bn ($411.2m). Analysts estimates compiled by Bloomberg had forecast ebitda at HK$2.99bn. The group’s revenue was up 5 per cent year on year at HK$14.1bn.

Macau’s casino industry is recovering from a two-year slump linked to an anti-corruption campaign in China, with new resorts switching their attention from high-stakes gamblers to families. Macau is the only place in China where casinos are legal.

Gaming revenue in the former Portuguese colony rose 16.3 per cent year on year in April to 20.16 billion patacas ($2.5bn), marking a ninth consecutive month of growth.

Galaxy said:

We remain confident in the longer term outlook for Macau, due to the growth of the Mainland middle-class whom have a strong desire for leisure, tourism and travel. GEG is ideally positioned to capitalize on this future growth with its unique and differentiated resort offerings and substantial development potential in both Cotai and Hengqin, combined with international opportunities, including Japan.

Galaxy’s Hong Kong-listed shares were down 0.9 per cent at HK$42.90 a share. The benchmark Hang Seng index was down 0.4 per cent.

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