Please ensure Javascript is enabled for purposes of website accessibility

Instant Analysis: Macau Gambling Revenue Growth Slightly Less Than Expected for June

By Eric Volkman - Jul 6, 2017 at 9:04AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of Wynn Resorts, Las Vegas Sands, and MGM Resorts International are down on the news.

What happened?

Gamblers in Macau are laying down comparatively more money, but not quite as much as analysts had expected. The enclave's Gaming Inspection and Coordination Bureau announced that gaming revenue for the month of June rose by 25.9% on a year-over-year basis to nearly 20 billion patacas ($2.4 billion).

Although that's an impressive growth figure at first glance, it fell just short of the average analyst estimate of 26.8%.

The stock prices of all three major American casino resort operators active on the Macau market slipped on the news. Since it was announced, Wynn Resorts (WYNN -2.81%) and Las Vegas Sands (LVS -0.24%) are both down marginally, while MGM Resorts International (MGM -2.50%) has declined by nearly 9%.

Macau at night

IMAGE SOURCE: GETTY IMAGES

Does it matter?

A big reason for the disappointment may be that the May growth figure was so encouraging. That month's revenue increase blew way past expectations, coming in at nearly 24%, versus the average expectation of a mere 16.5%. Compared to that, June's near-miss was crushing.

Wynn, Las Vegas Sands, and MGM investors should zoom out and look at the bigger picture, which is quite encouraging. Following a long period of decline due to restrictions on the local gambling industry imposed by the Chinese government, Macau has now recorded substantial year-over-year growth for 11 months in a row.

The three companies will reap the rewards of that growth. Wynn and Las Vegas Sands both recently opened their newest resorts in the Cotai region of the enclave (Wynn Palace and the Parisian Macao, respectively). Meanwhile, the MGM Cotai is slated to open its doors in the second half of this year.

Yes, Macau's June growth could have been better. But the enclave is still on the rise, and the power trio of American casino operators will ride the wave. Investors in those companies shouldn't be concerned about the June near-miss.

Eric Volkman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
WYNN
$63.67 (-2.81%) $-1.84
MGM Resorts International Stock Quote
MGM Resorts International
MGM
$34.73 (-2.50%) $0.89
Las Vegas Sands Stock Quote
Las Vegas Sands
LVS
$37.63 (-0.24%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.