Please ensure Javascript is enabled for purposes of website accessibility

Macao Gambling Revenue Plunges by Another 95% in July

By Rich Duprey – Aug 3, 2020 at 2:21PM

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

Casinos are hoping regulators will start to ease travel restrictions to the peninsula soon.

After the earnings reports from Las Vegas Sands, MGM Resorts International (MGM -1.83%), and Wynn Resorts, no one was thinking the July gambling revenue numbers out of Macao were going to be any good, but the fact they fell another 94.5% in the month suggests the casino operators' recovery is still well off in the distance.

The Gaming Inspection and Coordination Bureau said gross revenue from games of fortune plunged to just 1.34 billion patacas (the local Macao currency, the equivalent of $168 million) from 24.4 billion last year. It's the fourth consecutive month gambling revenue has been down over 90% year over year.

Man holding head as stock charts decline

Image source: Getty Images.

Odds are against a quick recovery

MGM Resorts tried to reassure investors that while the near-term outlook is difficult, its long-term business viability remains intact. Analysts seem to agree, slightly revising lower their outlook for this year, but expecting revenue to double next year and then rise 20% the year after. Yet if gambling remains suppressed in Macao, Wall Street may need to revise their numbers again.

Because the coronavirus pandemic began in China, China was the first country to impose travel restrictions. Casinos in Macao were closed for two weeks in February. When they reopened, despite social distancing protocols in place, tight controls were still placed on people traveling into and out of the peninsula. Those restrictions remain in place today. Analysts hope for regulators to ease up on travel either this month or in September.

Year-to-date gambling revenue is down 80% in Macao, but global resort operators still need to contend with the lack of recovery in the stateside travel and tourism industry, which could hamper their own rebound.

 

Rich Duprey has no position in any of the 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

MGM Resorts International Stock Quote
MGM Resorts International
MGM
$30.05 (-1.83%) $0.56
Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
WYNN
$59.65 (-0.90%) $0.54
Las Vegas Sands Stock Quote
Las Vegas Sands
LVS
$35.47 (0.51%) $0.18

*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
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

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.