Macau’s Gaming Growth Roars, Taking Wynn and LVS Higher

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Las Vegas Sands

Macau witnessed an impressive 22% growth year-over-year (yoy) in revenues in February. This growth is more noteworthy as the calendar shift moved the Chinese New Year to January this year. According to Macau’s Gaming Inspection and Coordination Bureau, Macau casinos, including Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN) and MGM Resorts International (NYSE:MGM), collected $3.04 billion from gamblers during the month.

Macau is of huge importance for gaming companies. For instance, Macau contributes approximately 60% to Wynn’s net revenues.

In 2011, the region collected $33.5 billion in gaming revenues, more than five times the gaming revenues collected on the Las Vegas Strip. ((Macau gaming revenues hit $3.04 billion in February, up 22 percent, Las Vegas Review-Journal)) Macau government’s series of initiatives to increase visitor count has played a major role in this growth. It is investing in new transportation links to ease travel for Chinese visitors, and now has a new railway line that connects Macau to Guangzhou in China in addition to a new road bridge that links it to Hong Kong.

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LVS also has a significant presence in Macau and operates through the Venetian Macao, the Sands Macao and the Four Seasons Hotel. According to analysts, LVS witnessed increased market share gains in 2011. These gains were primarily driven by the new VIP junket space at its Four Seasons property that opened in fourth quarter. [1]

The gaming stocks reacted positively to the February revenue numbers with Wynn witnessing an approximately 3% increase and LVS an approximately 2% increase on the day of release.

See our full analysis for LVS | Understand How a Company’s Products Impact its Stock Price at Trefis

  1. Macau gaming revenues hit $3.04 billion in February, up 22 percent, Las Vegas Review-Journal []