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Casino Names Getting A Boost Amid Word Chinese Government Could Be Moving Back Toward Macau Support

Casino Names Getting A Boost Amid Word Chinese Government Could Be Moving Back Toward Macau Support
  • Casino operators with exposure to Macau, such as Las Vegas Sands Corp. (NYSE: LVS) have seen their stocks plummet over the past year.
  • Gross gaming revenue in Macau fell in September, marking the 16th straight month of declines.
  • Bloomberg reported that China's government may move to support Macau's economy.

Gross gaming revenue, one of the most commonly used metrics to determine the health of casino operators in Macau, fell for the 16th consecutive month in September.

Shares of casino operators have fallen sharply over the past year as the economic environment in China deteriorated which directly impacted VIP gamblers. Moreover, a series of new policies in Macau also deterred and prevented gamblers from visiting the region.

Related Link: Downtown Vegas Gaming Revenue Jumps 15% In August

Shares of Las Vegas Sands have lost nearly 35 percent year-to-date and 38 percent from a year ago. Shares of Wynn Resorts, Limited (NASDAQ: WYNN) have seen even sharper declines, having lost 62 percent year-to-date and almost 70 percent from a year ago.

However, shares of Las Vegas Sands were higher by more than 3 percent Friday morning while shares of Wynn spiked higher by more than 5 percent. Investors and traders were buying casino stocks following the report by Bloomberg Business that China's government is set to introduce favorable policies for Macau.

"Any potential measures to help Macau's visitation could be a great boon for the industry, as casual gamblers are now becoming the key pillar of the industry profits in the midst of VIP weakness," Bloomberg quoted DS Kim, an analyst at JPMorgan.

The analyst noted that government support could include allowing more mainland Chinese cities to offer individual visas, and introduce multi-entry permits. In addition, Macau's jurisdiction over the region and surrounding sea waters is expected to be clarified by the end of the year. A favorable outcome could result in the city having additional space for new development projects.

Bloomberg added that the government in Beijing is also exploring studying how to boost tourism to Macau, according to Macao Daily newspaper. The announcement follows Macau's Chief Executive Fernando Chui's comments last month when he said that the city will unveil a new tourism strategy to attract more visitors.

Posted-In: Bloomberg casino casino stocks Fernando Chui MacauNews Global Econ #s Best of Benzinga


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