Updated 

Macau gaming revenues up 20 percent in July, 16 percent for 2013


Macau’s casino market during July recorded its second straight month of a 20 percent or better increase in gaming revenues.

The Macau Gaming Inspection and Coordination Bureau said Thursday that casinos in the Chinese region collected $3.5 billion in gaming revenues during the month, a 20 percent increase compared with the revenues collected in July 2012.

The growth surprised some prognosticators who expressed concerns of an economic slowdown in Asia.

“Despite all the negative headlines out of China, we have yet to see a meaningful slowdown in Macau gaming revenue,” Susquehanna International Group gaming analyst Rachael Rothman told investors.

For the first seven months of the year, Macau gaming revenues are up 16 percent over 2012 when the market reported record-setting gaming revenues of $38 billion.

Analysts said the increase was in line with most projections.

“We believe Macau fundamentals remain strong across all relevant segments and we have strong conviction that these trends are likely to continue through the balance of the year,” said Union Gaming Group principal Grant Govertsen, who is based in Macau.

The market is expected to see some $22 billion in new investments over the next four years.

Wynn Resorts Ltd., Las Vegas Sands Corp. and MGM Resorts International operate casinos in Macau and all three companies are building new resorts in the region’s Cotai Strip area.

Macau’s construction market is a mix of new hotel-casinos and expansions to existing properties. Wynn will spend up to $4 billion on a 2,000-room Cotai development. MGM Resorts has budgeted $2.5 billion for a 1,600-room Cotai resort. Both projects are slated to open in the first half of 2016.

Las Vegas Sands is spending $2.7 billion on a 3,000-room Parisian-themed hotel-casino on Cotai, which could open by the end of 2015.

“We continue to like the Macau gaming sector overall, driven by attractive marketwide revenue growth, particularly in the mass gaming segment, which should generate attractive free cash flow profiles for the group,” JP Morgan gaming analyst Joe Greff told investors.

Shares of Las Vegas Sands were up $1.63 or 2.93 percent to close at $57.20 while MGM Resorts was up 54 cents or 3.31 percent to close at $16.85. Both companies are traded on the New York Stock Exchange.

Wynn Resorts closed at $137.44 on the Nasdaq Global Select, up $4.31 or 3.24 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

 

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