HONG KONG (Dow Jones)--Gambling revenue in Macau rose 25% in December from a year earlier, government statistics showed Tuesday, capping off a year of incredible growth fuelled by players from mainland China despite intensifying concerns about the effects of credit-tightening or an economic slowdown there.

Macau, the only place in China where casino gambling is legal, saw gambling revenue soar 42% in 2011 to a record MOP267.87 billion (US$33.47 billion). The Chinese territory remains the largest gambling center in the world, with that figure over five times the size of the individual hauls analysts forecast the Las Vegas Strip and new Asian rival Singapore to record in 2011.

In December, gambling revenue in Macau rose to MOP23.61 billion, up from MOP18.88 billion a year earlier, according to data from the territory's Gaming Inspection and Coordination Bureau.

Revenue growth has been on a tear since the end of 2009, with players continuing to place bets regardless of China's tightening measures and local government policies aimed at slowing growth to a more measured pace.

The blistering pace of growth in 2011 "came as a surprise to most investors," said CLSA analyst Richard Huang. Those who did invest, however, enjoyed handsome share-price gains. Shares of Galaxy Entertainment Group Ltd. (0027.HK), which opened its enormous flagship Galaxy Macau casino in May, rose 62% over the year, while those of Melco International Development Ltd. (0200.HK) rose 30% and those of Sands China Ltd. (1928.HK), the Macau unit of Las Vegas Sands Corp. (LVS), jumped 29%.

The sharp gains contrasted the 20% decline in Hong Kong's benchmark Hang Seng Index for 2011.

Nonetheless, analysts believe the outlook for 2012 isn't as rosy and expect the pace of growth to slow, if for no other reason than the very large haul recorded the previous year.

They point to intensifying concerns over the sustainability of the recent explosive growth in VIP gambling, which accounts for nearly 75% of all gambling revenue in Macau.

The VIP market is driven by junkets operators, which bring high-spending gamblers to the casinos, issue them credit and collect debts in exchange for commission. As gambling debt isn't recognized in China, there are no legal means for casinos to recover debts owed to them by Chinese players.

However, little is known about junket operations. Their capital positions "aren't as strong as the street believes," wrote Wells Fargo analyst Cameron McKnight in a recent report.

A "modest decrease in VIP junkets' working capital efficiency, which is very likely in a slowdown scenario, could eliminate the majority of junkets' surplus capital," he wrote, adding that the Macau government's gambling table restrictions would be a significant supply constraint on VIP volumes.

McKnight forecast Macau gambling revenue to grow a much more modest 11% in 2012.

It was concerns over junkets' liquidity, attributed by some to news that many small private businesses in China's eastern city of Wenzhou had gone belly-up because they couldn't repay maturing bank loans, that drove a chilling across-the-board sell-off in casino shares in early October.

SJM Holdings Ltd. (0880.HK), Macau's largest operator by revenue, tanked 26% in just one trading session. Data has yet to show any evidence of an impending crash in Macau though, and October ended up setting a monthly all-time high for Macau gambling revenue.

But it is the opaque and notoriously difficult-to-forecast nature of the VIP business that has kept investors jittery and will likely continue to do so in 2012, analysts say. One of the key focuses for the year will be on "whether or not the floor is going to fall out of the VIP market," said Union Gaming analyst Grant Govertson. However, "I don't think [it] would," he said.

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