Market Overview

Macau Records Lowest Monthly Revenue Total Of The Downturn

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Macau Records Lowest Monthly Revenue Total Of The Downturn

According to data released by the Macao Gaming Inspection and Coordination Bureau, gaming revenue in the month of November came in at 16.4 billion patacas, about 32 percent lower than November 2014’s number.

Shares of Melco Crown Entertainment Ltd (ADR) (NASDAQ: MPEL), Las Vegas Sands Corp (NYSE: LVS), MGM Resorts International (NYSE: MGM) and Wynn Resorts, Limited (NASDAQ: WYNN) were all trading higher in early trading on Tuesday after enduring heavy selling pressure over the past month.

Still Searching For A Bottom

November marks the 18th consecutive month of year-over-year negative gaming revenue growth in Macau, and shareholders of Macau names are still searching for signs that the market has stabilized.

February marked the high point for gaming revenue declines so far in 2015 at -48.6 percent. After October number marked the highest monthly revenue total for Macau since May and the lowest year-over-year decline since January, the November number was another step in the wrong direction. November's GGR of only 16.4 billion patacas represents the lowest monthly gaming revenue total for Macau so far during the current downturn.

Related Link: Las Vegas Strip Revenue Falls 5.1% In October

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 September, headlines of potential junket embezzlement of up to $258 million dollars had investors worried about even more government regulation down the road.

In addition, fears surrounding the impact of a smoking ban in Macau casinos have also weighed on share prices.

Sluggish Stocks

After a strong October performance, the stocks of the four Macau operators gave up much of the gains throughout a weak November.

Of the four names, Las Vegas Sands was the most resilient over the past month, trading down only 0.43 percent.

Disclosure: The author owns shares of Melco Crown Entertainment and Wynn Resorts.

Posted-In: casinos China gaming MacauNews Econ #s Best of Benzinga

 

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