Macau’s lower-than-expected gross gaming revenue (GGR) in June has been felt around the world with the US share prices of Las Vegas Sands and Wynn Resorts falling to long-time lows on Monday.
Las Vegas Sands, which operates five integrated resorts in Macau, saw its shares fall 6.7% to US$71.27 for a three-month low, the Las Vegas Review-Journal reported, while Wynn Resorts fell 7.9% to US$154.14 – its lowest closing price in 2018.
Macau’s gaming revenue grew 12.5% year-on-year in June to MOP$22.49 billion, significantly below expectations of near 20% growth on the back of the recent dragon boat holiday and the opening of Morpheus at City of Dreams in mid-June.
A number of analysts noted the significant deceleration in growth in recent months as a sign that the market is cooling, while others pointed to the Russia World Cup as having also kept some players away.
However, Union Gaming’s Head of Asia Equity Research, Grant Govertsen, remains bullish, stating in a Monday note that “at this point we’re not concerned.
“Keep in mind that Macau has bad weeks all the time and one bad week doesn’t make a trend,” he said, pointing to one of the toughest comps of the year as a major cause. “That June still grew 12.5% on top of a nearly +26% comp is impressive in its own right.
“Further, we believe bad luck on VIP and premium mass at certain operators also played a part to the downside. We would also attribute some very small fraction of the miss to the World Cup, although we think this has only impacted a small sliver of players.”
While some predicted the opening of Morpheus at City of Dreams on 15 June would boost revenue growth, Govertsen said such impact will take more time.
“We’re not seeing the market-growing benefit from the most recent supply as it needs to be finished before it can begin ramping properly,” he said.
“Put another way: without truly feeling the benefit of the newest supply and against a tough comp, we think the market is demonstrating its resilience with GDP+++ growth and would look for a rebound in growth rates as comps ease and as new supply begins to ramp more closely in line with historical trends later this year.”
