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Wynn Resorts, Limited (WYNN), Las Vegas Sands Corp. (LVS), MGM Resorts International (MGM): Casino Stocks Still Under Pressure As Macau Posts Another Decline Of Revenue From Gaming

The shares of Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), and MGM Resorts International (NYSE:MGM) started the day on a lower note after Macau posted another month with declining gaming revenue. According to the report, Macau’s gaming revenue was down 34.5% in July in comparison with the prior year period. The only relief was the fact that the decline was slightly better than the 36% decline witnessed in June. Macau reported gaming revenue of $2.3 billion in July better than the revenue of $2.17 billion reported in June 2015. The analysts were expecting a drop of 34% to 35% in the monthly revenue.

The shares of Wynn Resorts, Limited (NASDAQ:WYNN) were down 1.50% on Monday intraday trading, whereas Wynn Macau Ltd. (HKG:1128) closed the day 4.62% lower. Las Vegas Sands Corp. (NYSE:LVS) is marginally down by 0.80%. On the other hand, MGM Resorts International (NYSE:MGM) was up 1.40%, although its Chinese subsidiary, MGM China Holdings Ltd (HKG:2282), closed 3.65% lower at the end of the day.

macau 2

With the drop in revenue in July, Macau has reported consecutive drop in revenue for the past 14 months, primarily because of heightened official scrutiny in the area along with a slowing down Chinese economy. However, the revenue is improving after a maximum drop of 48.6% in February with comparatively easing figures. With the drop in July, the gaming industry has reported a drop of 36.7% year-to-date. As per analysts’ expectations, the industry might end this fiscal year with a drop of 30%, although it is likely to reiterate in 2016 with an expected gain of 4.5%. Further, the analysts are expecting the revenue to improve in the second half because of upcoming resort and casino launches in Macau. The local government is likely to implement some improvement measures if the revenue falls below $2.30 billion, as reported by the local media.

What makes this overall drop a bit disheartening is the fact that the Macau regulatory bodies eased the visitation limits for Chinese customers earlier in July, including a stay of seven days against prior 5-day approval, along with two monthly visits in comparison with the two visits allowed per 60 days before.

At the end of the first quarter, Wynn Resorts, Limited (NASDAQ:WYNN) had an aggregate investment of $936.81 million from 25 hedge funds that we track at Insider Monkey. These figures were better than the prior quarter value of $878.66 million from 40 investors. Mason Hawkins’ Southeaster Asset Management was the largest shareholder of gaming company in our database with 4.57 million shares valued at $575.75 million.

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