Macau gaming revenue, trade war pause helped some Las Vegas casinos

The holiday season is off to an early start for some Las Vegas casino operators.

Companies with operations in Macau were presented with a double dose of good news as the U.S. and China announced a pause in their trade spat and Macau gross gaming revenue growth accelerated.

Shares of Wynn Resorts, Las Vegas Sands Corp. and MGM Resorts International rallied Monday to their highest levels in at least four weeks.

Shares of Wynn Resorts jumped 9.5 percent to $119.79, while Sands advanced 6.1 percent to $58.34. Both Wynn Resorts and Sands generate more than half their earnings from Macau.

MGM Resorts rose 3.9 percent to $28.02. MGM generates about 16 percent of its earnings from Macau.

However, Wall Street analysts warned that the seasonal cheer for gaming stocks may be short-lived. Macau VIP growth continues to slow, and expiration dates are approaching for Macau gaming licensees held by Wynn Resorts, Sands and MGM.

Macau rebound

The first gift for the Las Vegas casino operators came from Macau’s Gaming Inspection and Coordination Bureau. The bureau announced Saturday that November gross gaming revenue accelerated to 8.5 percent compared with the same month a year earlier. That beat Wall Street forecasts of 4 percent growth.

Macau gross gaming revenue growth had been surging for nearly two years through April, helping shares of Wynn Resorts to double in value over that time. Growth slowed sharply in May, when the U.S. and China threatened to slap tariffs on each other’s goods. It continued to decline as those threats became a reality.

Gross gaming revenue growth tumbled from a high of 36 percent in January to just 2.6 percent in October, led lower by VIP players.

Brian McGill, gaming analyst at Telsey Advisory Group, tossed cold water on the November data, saying the beat was mainly driven by higher hold as well as an extra Friday this year compared with November 2017.

“The bottom line here is that despite a modestly impressive headline number for November, neither the underlying demand trends nor the regulatory outlook and competitive environment seem conducive for current Macau operators,” the analyst said in a note Monday.

Stifel analyst Steven Wieczynski disagreed, saying the Macau market “continues to hold up better than the ‘fear’ that is associated with it.”

Trade truce

Stocks also reacted positively to a Saturday announcement from President Donald Trump and President Xi Jinping of China. They agreed during the G-20 meeting in Buenos Aires, Argentina, to pause the escalation of the trade fight between their two nations for 90 days.

This year, Trump imposed an import tax of 25 percent on $50 billion in products, then hit an additional $200 billion worth of goods with 10 percent tariffs.

The imposed tariffs have steepened an economic slowdown in the world’s second-largest economy and sent global stocks — including shares of Macau gaming operators — tumbling amid fears the spat would intensify.

It nearly did. Those 10 percent tariffs were scheduled to ratchet up to 25 percent on Jan. 1 if Trump and Xi failed to strike a deal in Buenos Aires.

Under the terms reached Saturday, Trump agreed to delay the scheduled U.S. tariff increase for 90 days while the two sides negotiate over the administration’s technology-related complaints.

In return, China agreed to buy what the White House called a “not yet agreed upon, but very substantial” amount of U.S. products to help narrow America’s gaping trade deficit with China.

License renewal

The bigger concern for the three Las Vegas operators is not the Macau growth outlook or the trade war, Jefferies analyst David Katz said, but the approaching expiration of their Chinese gaming licenses.

MGM Resorts’ license expires in 2020, while those for Las Vegas Sands and Wynn Resorts end in 2022. This is the first time gaming licenses are terminating for Macau operators, and Chinese authorities have not indicated how they will handle the re-bidding process.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Todd Prince at 702-383-0386 or Follow @toddprincetv on Twitter. Las Vegas Review-Journal staff writer Bailey Schulz and The Associated Press contributed to this report.

Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Fun photo booth at World of Concrete
World of Concrete show at the Las Vegas Convention Center sponsored by DeWalt gives conventioneers a chance for photos with giant tools. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: Laserstar Technologies
Laerstar Technologies showed off their laser engraving machines, that can be used to personalize anything from guns and knives, to medical tools and household items. (Mick Akers/Las Vegas Review-Journal)
World of Concrete Show has big equipment on display
World of Concrete Show has big equipment on display at the Las Vegas Convention Center including an impact crusher, concrete pump and a self-erecting portable concrete batch plant. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Shot Show 2019: Kalashnikov USA shows off new products
Jonathan Mossberg of Kalashnikov USA talks about new products on display at Shot Show 2019 in Las Vegas.
News Headlines
Home Front Page Footer Listing