The Parisian in Macau. Image source: Las Vegas Sands.

What happened 

Shares of Las Vegas Sands Corp. (NYSE:LVS) gained 14.6% in September, according to data provided by S&P Global Market Intelligence, after Macau started to show the improvements investors have been hoping for.

So what

In early September, the Macau Gaming Inspection and Coordination Bureau announced that August gaming revenue in the region was up 1.1% to $2.4 billion. The gain was small, but important ahead of the Sept. 13 opening of Las Vegas Sands' The Parisian on the Cotai Strip.

The hope is that The Parisian and Wynn Resorts' Wynn Palace on Cotai will inspire tourists and gamblers to come back to Macau in droves and there are small signs that's happening. September gaming revenue rose 7.4% from a year ago to $2.3 billion, the most year over year growth we've seen since May 2014. Two months of growth doesn't signal a recovery, but for an industry looking for green shoots it's something investors are reading a lot into right now.

Now what

Las Vegas Sands really needs Macau's gaming revenue to grow to justify the $2.7 billion cost of building the resort. If Macau's gaming revenue doesn't grow, Las Vegas Sands' overall revenue will be cannibalized by competitors' resorts, which will continue to open over the next year. Signs of growth are good, but the pop in shares could be reversed with signs in coming months that growth is short lived. So, investors will want to watch revenue trends and market share data to see whether or not Las Vegas Sands' revenue in Macau is going to be growing or contracting over the next year.

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