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Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help readers generate real-estate-related stock ideas.

Shares of



and other Macau casino operators surged Wednesday after Chinese government data showed that first-quarter gaming revenue jumped 45% in the region.

The Macau Gaming Inspection and Coordination Bureau reported that revenue rose to $2.23 billion from $1.54 billion, according to the

Associated Press


Shares of Melco were up 7% to $17.86 in recent trading. The stock is now up more than 15% since we placed it in the Bricks and Mortar mock portfolio

last month.

Las Vegas Sands

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(WYNN) - Get Wynn Resorts, Limited Report

, which also operate casinos in the region, were climbing as well. Las Vegas Sands jumped 3.6% to 91.01, while Wynn added 2.7% to $103.53.

The government data was exactly the sort of news needed to remind Melco investors that Macau remains a red-hot market. Melco opens its first casino in the area, the Crown Macau, on May 9.

Macau, a former Portugese colony, is the only region of China where gambling is legal. Macau surpassed Las Vegas as the world's largest gambling destination last year.

One crucial piece of my thesis on Melco is that the Crown casino will become the dominant destination for high-rolling gamblers.

The latest government data shows Macau's "VIP" gaming revenue, measured in terms of bets, rose 50% in the quarter, as the Chinese stock market continues its strong performance, Deutsche Bank analyst Bill Lerner wrote in a research note. The Shanghai Index hit an all-time high in the first quarter and rose 19% from last year.

The mass market segment of Macau also revived itself in the first quarter, with 32% year-over-year growth. That compares to 10% growth in the fourth quarter. "This proves concerns on sluggish growth of this high-margin segment are overblown," Lerner wrote.

That growth is good news, since Melco's future casinos will also cater to the mass market.

Despite Wednesday's run-up, I'm keeping my "own" rating on Melco because I feel the stock should gravitate above $20 this year once Crown Macau opens and investors have some firm financials to grasp.