Gambling dollars flowing into Macau casinos are nothing new, but this year may shock even the most bullish followers of gaming stocks. This year, one analyst upped its forecast of Macau's gaming take to 30% growth over last year. It isn't too late to upgrade that number again, considering the latest news.
In March, Macau casinos took in more than 20 billion Macanese patacas, or $2.5 billion. That's the first time the gambling haven has passed that milestone, and it's an incredible 48% growth over last year. January gaming grew 33.2%, and February rose 47.7%, so the growth momentum is only getting stronger.
The news has sent Las Vegas Sands (NYSE: LVS ) and Wynn Resorts (Nasdaq: WYNN ) higher today by 4% and 6%, respectively. Ironically, the only pure Macau play, Melco Crown (Nasdaq: MPEL ) , is only even with the gains of MGM Resorts (NYSE: MGM ) , which has just a small presence in Macau. No one ever said daily market moves make total sense.
The gaming comparisons in Macau get tougher as the year goes on, but gaming take for March was already 6.4% higher than 2010's best month. I can't imagine anything but growth unless a freak natural disaster hits the center of the Cotai Strip. If that's the biggest risk going forward, I'll take it.
This is good news for at least one gaming company that's had a bumpy ride lately. Las Vegas Sands investors are shrugging off the company's legal troubles after CEO and major shareholder Sheldon Adelson said about the investigation, "When the smoke clears, I am 1,000 percent positive that there won't be any fire below it." Adelson has never been known as a model of humility, but his words have to ease a bit of concern for shareholders.
Know when to hold 'em
Considering the growth that Macau has demonstrated year after year, I see no reason to be anything but bullish on casino operators there. There will be ebbs and flows as rivals steal customers from each other, but to use an old cliche, the rising tide will lift all boats.