Casino companies operating in Macau were in focus on Friday after it was reported that gaming revenue in the region jumped 166% last month compared to the same month of last year. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).
GAMING DATA: Macau's Gaming Inspection and Coordination Bureau said gross revenue from games of fortune in the region increased 165.9% to 5.879B patacas in September compared to the same month of last year. This compares to an increase of 234% to 4.44B patacas in August compared to the same month of last year and a 528.1% year-over-year increase in July to 8.44B patacas. Year-to-date GGR is 67.787B patacas, a 75.6% increase from 38.605B patacas last year.
WHAT'S NOTABLE: Macau has ramped up efforts to promote tourism to mainland residents given that both sides have largely managed to contain the virus, but, the city's government still has tight restrictions for travelers from most spots, including neighboring Hong Kong and Taiwan. May's revenue was aided by the five-day Labor Day Golden Week. According to the Macau Government Tourism Office, 167,000 visitors came to Macau during the holiday, with more than 93% from China.
While Macau's tighter countermeasures to prevent the spread of Covid-19 were gradually eased between the second half of June and early July, travel restrictions between Macau and mainland China were again increased in late July due to new Covid-19 infections on the mainland. As of midnight on July 31, people intending to enter Macau on a direct flight from mainland China must hold a nucleic acid test certificate issued within 48 hours proving they are negative for Covid-19, and as of August 2, Macau authorities have also added new locations to the list of places where departing travelers must do a 14-day quarantine upon arrival in Macau.
Macau casino revenue was up just 32.4% sequentially in September due to a Covid-19 alert in the region. According to reports, the daily volume of mainland tourists to Macau went down at the end of September, coinciding with neighboring Zhuhai in Guangdong province introducing a 14-day quarantine for inbound travel from Macau, after two new Covid-19 cases were detected in Macau last weekend. Macau authorities reported a total of seven new Covid-19 cases between the weekend and Tuesday, according to media reports.
Looking ahead, all eyes are on the start to the October Golden Week in Macau.
ANALYST COMMENTARY: Bernstein analyst Vitaly Umansky said Golden Week is likely to be completely derailed, despite already very low expectations, after Zhuhai, Guangdong, the city with land crossings into Macau, announced this week that travelers coming in will continue to be subjected to 14 days quarantine from October 1. On the other hand, Umansky notes that the Fujian Covid outbreak "seems to have subsided" as the province reported zero local case on September 30, the first time since September 10 and after reporting a total of 467 local cases.
PRICE ACTION: In morning trading, shares of Las Vegas Sands rose 2.1% to $37.38, MGM Resorts shares were up 2% to $44.04, Wynn Resorts shares gained 1.5% to $85.98, and Melco Resorts shares trading in New York were up 2.5% to $10.50.
Las Vegas Sands
+0.56 (+1.53%)
MGM Resorts
+0.54 (+1.25%)
Wynn Resorts
+0.4 (+0.47%)
Melco Resorts
+0.18 (+1.76%)