Macau Records 12th Consecutive Month Of Gaming Revenue Declines

According to data released by the Macao Gaming Inspection and Coordination Bureau, gaming revenue in the month of May came in at 20.3 billion patacas, about 37 percent lower than May, 2014.
 

Shares of Melco Crown Entertainment Ltd MPEL, Las Vegas Sands Corp LVS, MGM Resorts International MGM and Wynn Resorts Ltd WYNN all opened down on Monday following the news.
 

Has Macau Finally Reached Rock Bottom?
May marks the twelfth consecutive month of negative gaming revenue growth in Macau, but shareholders of Macau names are hoping that they have reached a turning point.

February marked the high point for gaming revenue declines so far in 2015 at -48.6 percent. After two consecutive monthly revenue declines came in at nearly exactly -39 percent, May’s -37 percent could be another sign that the Macau market is finally stabilizing.

The End Of The Bad News Barrage?
Macau has seen a seemingly constant stream of bad news over the past year. Last year, the Chinese government announced a crackdown on corruption in Macau.

Increased government scrutiny coupled with a weakening Chinese economy led to a major falloff in VIP gamblers.
In addition, recent talks of expanding the partial smoking ban instituted in Macau casinos in October and capping the number of visitors to Macau from mainland China have increased pressure on stocks.

Other numbers
May’s 37 percent decline is in-line with Macau’s overall year-over-year decline for the first five months of 2015. The combined market value of Macau’s six operators is down more than $24 billion year-to-date.

Disclosure: the author owns shares of Melco Crown Entertainment.