Gambling revenue in Macau rose 35% in January from a year earlier, government statistics showed Wednesday, as players from mainland China continued to fuel solid growth. But the outlook for the rest of the year remains murky.

Macau, the only place in China where casino gambling is legal, saw gambling revenue rise to MOP25.04 billion (US$3.13 billion) last month, up from MOP18.57 billion a year earlier, according to data from Macau's Gaming Inspection and Coordination Bureau. The figure was bolstered by the week-long Lunar New Year holidays but fell short of the all-time monthly high of MOP26.85 billion hit in October.

The Chinese territory remains the largest gambling center in the world many times over. Last year it raked in more than five times the gambling revenue analysts estimate the Las Vegas Strip earned.

Macau's revenue growth has been explosive since the end of 2009 as players have continued to place bets regardless of China's tightening measures and local government policies aimed at slowing growth to a more measured pace, but analysts have a less bullish outlook for 2012. Wells Fargo analyst Cameron McKnight is one of the most bearish with a forecast for 11% gambling revenue growth this year compared with last year's blistering 42% rise.

Investors are particularly concerned about whether the fierce growth in VIP gambling, which accounts for nearly 75% of all gambling revenue in Macau, is sustainable. The VIP market is driven by junket operators, which bring high-spending gamblers to the casinos, issue them credit and collect debts in exchange for commissions. Since gambling debt isn't recognized in China, there are no legal means for casinos to recover debts owed to them by Chinese players.

But despite similar concerns raised by analysts and investors the past two years, Macau's revenue growth has managed to exceed expectations.

"The year-on-year comparison forecasts are becoming more and more challenging for us," said CIMB analyst Teng Yee Tan, noting the opaqueness of the junket business. He is currently forecasting 15%-18% growth for 2012.

Shares of casino operators continue to outperform other listed stocks in Hong Kong with Galaxy Entertainment Group Ltd. (0027.HK), which opened its enormous flagship Galaxy Macau casino in May, up 21% year to date at HK$17.22. Shares of Sands China Ltd. (1928.HK), the Macau unit of Las Vegas Sands Corp. (LVS) set to open a massive expansion project this year, have also risen 21% to HK$26.45. Hong Kong's benchmark Hang Seng Index has risen 10% so far this year to 20,333.37 points.

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