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\tBy Howard Stutz, Las Vegas Review-Journal
\n\tThe last time Macau\u2019s casino industry experienced a monthly gaming revenue decline, the Los Angeles Lakers won their 16th National Basketball Association championship and the Los Angeles Kings were National Hockey League doormats.<\/p>\n
\tFortunes can change quickly in both sports and gambling.<\/p>\n
\tLast season, the Lakers were one of the NBA\u2019s worst teams. The Kings won their second Stanley Cup in three years.<\/p>\n
\tIn Macau, there are ominous signs the market will suffer its first gaming revenue decrease since June 2010.<\/p>\n
\tThat sound you hear isn\u2019t Wall Street jumping off the bandwagon, but the noise made by hitting a pothole on the revenue superhighway.<\/p>\n
\tGaming analysts told investors to relax and catch their breath.<\/p>\n
\tDon\u2019t start selling off your shares of Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International just yet. The Nevada companies are spending billions of dollars to expand their Macau holdings by 2016. That won\u2019t change.<\/p>\n
\tThrough the first five months of 2014, Macau\u2019s gaming revenue total is up 15.8 percent over 2013. Last year, the three-dozen casinos in the Chinese special administrative region produced a world-record $45.2 billion in gaming revenue.<\/p>\n
\tThe 2013 figure was an 18.6 percent increase over 2012\u2019s previous record of $38 billion.<\/p>\n
\tOn Monday, Sterne Agee gaming analyst David Bain warned investors to brace for bad news when June\u2019s revenue figures are released next week by Macau\u2019s Gaming Inspection and Coordination Bureau.<\/p>\n
\tBut he didn\u2019t revise his initial projections for an 11 percent gaming revenue increase for all of 2014.<\/p>\n
\t\u201cFollowing investor-digested, mostly sensationalized issues, concerns have shifted to short-term (high-end) results driving overall (gaming revenue), creating a salivating buying opportunity for longer-term investors,\u201d Bain said.<\/p>\n
\tOnce again, soccer is to blame.<\/p>\n
\tMacau\u2019s high-end end gamblers have a much higher interest in results from the World Cup matches in Brazil than the cards flying across the baccarat tables in peninsula and Cotai Strip casinos.<\/p>\n
\tIn June 2010, gaming revenue in Macau declined 20 percent. The month coincided with the opening matches of soccer\u2019s 2010 World Cup in South Africa. The drop was met with a chorus of vuvuzelas.<\/p>\n
\tFast forward four years and history is repeating itself.<\/p>\n
\t\u201cGaming revenue headwinds from the World Cup have begun,\u201d Bain said. \u201cThis once in every four-year disruption does not change our long-term secular outlook. We would use any corresponding stock weakness as a buying opportunity.\u201d<\/p>\n
\tBain noted that in July 2010, gaming revenue surged 18 percent. He expects a similar event next month with the World Cup ending on July 13.<\/p>\n
\t\u201cPost-World Cup pent-up demand positively influenced the back half of July 2010,\u201d Bain said.<\/p>\n
\tSo where is all the baccarat wagering going?<\/p>\n
\tAccording to Hong Kong\u2019s South China Post, police last week broke up an illegal betting ring at an unnamed Macau hotel that took in roughly $645 million in wagers on the World Cup, including a single bet of $51.5 million. It was the second-such arrest for illegal soccer wagering.<\/p>\n
\tThe illegal sports betting market siphoned off bets that could have been placed with the Hong Kong Jockey Club, which has a government-mandated monopoly on sports and racetrack wagering.<\/p>\n
\tThat sound you\u2019re hearing is the samba.<\/p>\n
\tDeutsche Bank gaming analyst Carlo Santarelli said Macau\u2019s June prospects caused him to lower his second-quarter and 2014 estimates for Wynn Resorts. The three-month period ends Monday and Wynn draws 80 percent of its quarterly revenue and cash flow from Wynn Macau and Encore at Wynn Macau.<\/p>\n
\tSantarelli didn\u2019t lower his expectations for Wynn\u2019s price per share, which closed Tuesday at $201.64, up 48 cents, or 0.24 percent, on Nasdaq. The company\u2019s share price is the highest in the gaming industry.<\/p>\n
\t\u201cOur property level forecasts are down given lower (high-end) volume and lower-than-expected mass revenue specifically,\u201d Santarelli said.<\/p>\n
\tWells Fargo Securities gaming analyst Cameron McKnight said he expects the Macau numbers to be down in June, but he didn\u2019t change his outlook for the market.<\/p>\n
\t\u201c(High-end) play continues to be impacted by the World Cup,\u201d McKnight said. \u201cWe would expect levels of play for the rest of June to trend around or below current levels.\u201d<\/p>\n
\tMcKnight warned investors, however, the rest of 2014 could be \u201cchoppy\u201d because of a number of factors, including \u201cdecelerating credit growth and a softer macroenvironment.\u201d<\/p>\n
\tThe only other time in recent history the market came close to a decrease was in July 2012, when gaming revenue climbed just 1.5 percent. Twice already in 2014 have Macau\u2019s gaming totals increased by less than double-digit percentages.<\/p>\n
\tSo nothing is impossible.<\/p>\n
\tThen again the Kings will be gunning for their third hoisting of the Stanley Cup in 2015.<\/p>\n
No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"
By Howard Stutz, Las Vegas Review-Journal The last time Macau\u2019s casino industry experienced a monthly gaming revenue decline, the Los Angeles Lakers won their 16th National Basketball Association championship and the Los Angeles Kings were National Hockey League doormats. Fortunes…<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7546","post","type-post","status-publish","format-standard","hentry","category-latest-casino-news"],"_links":{"self":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7546","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/comments?post=7546"}],"version-history":[{"count":0,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7546\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/media?parent=7546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/categories?post=7546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/tags?post=7546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}