The world’s largest casino gambling market just had its best month in three years. On Wednesday morning, Macau reported 22.1 percent gross gaming revenue growth in October, easily topping consensus analyst expectations of 14.5 percent growth.
Macau gaming stocks Melco Resorts & Entertainment Ltd. ( MLCO), Wynn Resorts Ltd. ( WYNN), Las Vegas Sands Corp. ( LVS) and MGM Resorts International ( MGM) all rallied on Tuesday following positive Macau commentary from Nomura. That rally continued on Wednesday morning after Macau reported $3.3 billion in revenue, its highest monthly total since October 2014. The strong monthly number was boosted by an uptick in revenue following the Chinese Golden Week holiday the first week of October.
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October marks Macau’s 15th consecutive month of year-over-year gross gaming revenue growth after a two-year downturn due to a government corruption crackdown. Macau gaming revenue has now grown at least 16 percent in each of the past nine months.
The impressive growth in the Macau market has been reflected in the share prices of casino stocks this year. All four U.S.-listed stocks are up double digits year-to-date, led by Wynn’s 74 percent gain.
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This week’s rally got kicked off on Tuesday by a report from Nomura analyst Harry Curtis.
“Our latest consultant checks point to a noticeable pickup in demand following the 19th Party Congress in China, with VIP and mass revenue up about 30 percent and 9 percent year-over-year, respectively,” Curtis said, according to CNBC.
“Post-Golden Week demand this year has trended much … better than expected.”
Y H & C Investments analyst Yale Bock anticipates smooth sailing for Macau. “It appears the 2018 outlook for gross gaming revenue in Macau is solid,” Bock says. “The opening of a ferry terminal next to Cotai and the Morpheus project should enhance a positive environment after the Communist Party convention. Without travel restrictions, the bigwigs from the mainland seem to love the games of chance.”
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Daiwa Capital Markets Hong Kong Ltd. analyst Jamie Soo says at least one Macau junket reported a 40 percent surge in wealthy VIP gamblers in Macau in October. The surprisingly strong October revenue numbers suggest VIP gamblers are finally returning to Macau in droves following the 2014 corruption crackdown.
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Macau Gambling Revenue Hits 3-Year High originally appeared on usnews.com
