Market Overview

Macau Revenue Down 21.2% In December

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Macau Revenue Down 21.2% In December

According to data released by the Macao Gaming Inspection and Coordination Bureau, gaming revenue in the month of December came in at 18.3 billion patacas, about 21 percent lower than December 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 lower in early trading on Monday by more than 2.3 percent after booking gains during the month of December.

Still Searching For A Bottom

December marked the 19th consecutive month of year-over-year (Y/Y) negative gaming revenue growth in Macau, and shareholders of Macau names are still searching for signs that the market has stabilized.

February 2015 marked the high point for gaming revenue declines so far in 2015 at -48.6 percent. November's GGR of only 16.4 billion patacas represented the lowest monthly gaming revenue total for Macau during the current downturn. December’s total marked both a slight bounceback from November’s lows and the lowest Y/Y monthly decline since January of 2014.

Related Link: Pareto Capital Short Melco Crown: Target Price Under $1.00

The Bad News Barrage

Macau has seen a seemingly constant stream of bad news over the past year. In 2014, 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

Shareholders of the four U.S.-listed Macau names are happy to be done with 2015. While MGM booked an 8.0 percent gain on the year, Sands, Melco and Wynn finished the year down 22.1, 30.5 and 52.9 percent, respectively.

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

Image Credit: Public Domain

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