Market Overview

Macau's Gambling Market Is Shrinking

Share:
Macau's Gambling Market Is Shrinking
Related MPEL
Vegas Strip Gaming Win Outpaces State Of Nevada In June
EOG Resources, Kinder Morgan, Melco Crown, Starbucks: Fast Money Picks For March 23
Related LVS
Morgan Stanley Likes The Odds Of A Las Vegas Sands Investment
This Tool Makes It Easy To See How Company Dividends Have Changed Over Time
Las Vegas Sands marks 10th anniversary of Venetian Macao (Seeking Alpha)

The latest revenue numbers are out for the world’s largest gaming market, and they continue to fall well short of last year's marks. January gaming revenue in Macau fell 17.4 percent year-over-year, marking the eighth straight month revenues have slipped below 2014 levels.

The Numbers

January’s revenue number for Macau was 23.7 billion patacas for the month.

Not only did this number fall short of 2014’s number for January, it fell well short of 2013’s revenue for the month as well.

A look at the graph of monthly revenue indicates next month could be a particularly painful one for year-over-year comparisons in Macau. Last February marked the 2014 peak in monthly gaming revenue before a slowdown in the Chinese economy and a crackdown on money laundering in Macau by the Chinese government brought revenues crashing down in the second half of the year.

Related Link: Susquehanna Previews Wynn Resorts, Expects Macau To 'Exceed Expectations'

Unless Macau’s sees a more than 60 percent month-over-month jump in revenue in February, it will mark the ninth consecutive month of negative year-over-year growth.

Hope For 2015

The near-term outlook for Macau might not look great, but there are reasons to be hopeful longer-term. Four major casino operators have new Macau mega-resorts currently slated to open in 2015 or 2016.

The first to open its doors will likely be Melco Crown Entertainment Ltd (ADR) (NASDAQ: MPEL)'s Studio City, followed by Las Vegas Sands Corp. (NYSE: LVS)'s Parisian Macau.

New resorts from Wynn Resorts, Limited (NASDAQ: WYNN) and MGM Resorts International (NYSE: MGM) are coming soon as well.

Galaxy Entertainment Group plans to complete a $2.5 billion expansion to its Galaxy Macau property in 2015. Casino operators are hoping the novelty of these resorts will draw new visitors to Macau.

Disclosure: the author owns shares of Melco Crown Entertainment.

Image credit: Billy Au, Wikimedia

Posted-In: News Travel Global Econ #s General Best of Benzinga

 

Related Articles (LVS + MGM)

View Comments and Join the Discussion!

Partner Center