Casino stocks pop as Macau gambling revenue falls less than feared

A number of casino stocks, including Wynn Resorts, Las Vegas Sands and MGM Resorts, rose on Monday amid positive news from the much-maligned Macau gambling scene.

Macau, the world’s biggest casino hub, posted a drop of 9.5 percent in gambling revenue for April, to about $2.17 billion, marking the 23rd consecutive monthly decline for the former Portuguese colony. That said, the decline was less than feared.

Shares of Wynn popped nearly 6.8 percent Monday, while Las Vegas Sands and MGM resorts gained about 3.5 percent and 1.7 percent, respectively.

That said, Wynn and Las Vegas Sands are still down 16.35 percent and 11.56 percent in the past year, respectively, while MGM has only risen 1.26 percent.



Studio City to get 250 new-to-market tables

Studio City International Holdings Ltd announced today that the Macau government has authorized Studio City’s gaming operator, Melco Crown (Macau) Ltd, to operate 250 new gaming tables and 1,233 new gaming machines.

Furthermore, 200 of the 250 gaming tables and all of the gaming machines may be in operation by the time of Studio City’s opening. The remaining tables will be permitted to become operational starting from January 2016.

“We thank the Macau Government for its consideration of our application and approval of gaming tables and machines for Studio City. We are confident that Studio City’s offering of cinematically-themed entertainment, retail, food and beverage and accommodation options will contribute meaningfully to the economic and employment diversification of Macau. We are excited to welcome Studio City’s first patrons later this month,” said Lawrence Ho, the Co-Chairman and Chief Executive Officer of Melco Crown Entertainment.
Earlier this year, Melco Crown Entertainment said that it might fall into default on a HKD10.86 billion loan if it was unable to open “with a minimum [of] 400 gaming tables available for operation.”
Studio City now plans to engage lenders under its senior credit facilities to discuss proposed amendments to the terms of the casino’s loan documentation. This is the direct result of the shortfall in the number of tables that have been allocated.

The announcement comes only days after Wynn Macao and the local authorities engaged in a series of verbal attacks regarding the delays in the allocation and limits of gaming tables. Steve Wynn, Chairman and Chief Executive Officer of Wynn Resorts, criticized the government delays last Friday, saying that the uncertainty around the number of tables to be allocated was complicating decisions concerning the hiring and training of workers, and could force Macau operators to terminate employees.

The government responded by expressing its dissatisfaction over the remarks, reaffirming the merits of the table cap policy, and summoning Wynn representatives to a meeting with the Secretary for Economy and Finance, Lionel Leong, on Sunday.

The allocation of tables and annual cap are part of a larger effort to diversify Macau’s economy and ease its reliance on the gaming industry, following the orders of Xi Jinping in December 2014. The table cap policy limits the growth of live dealer tables to 3-percent compound annual expansion until the end of 2022. Staff reporter

Macau Says Casinos Need to Heed Its Rules After Wynn’s Gripes

Macau’s government has hit back at Steve Wynn’s criticism of its policies, demanding casino operators comply with its rules days after the Las Vegas tycoon criticized delays in being informed how many gaming tables he will get for a new multi-billion dollar resort.

Casino representatives including Wynn Macau Ltd. president Gamal Aziz were summoned for a meeting Sunday with the city’s secretary for economy and finance Lionel Leong, according to the Hong Kong-listed unit of Steve Wynn’s casinos operator. The 73-year-old Wynn on Thursday lambasted government limits on gaming tables and said delays in casinos being informed how many would be allocated were “outrageous and ridiculous”.

Macau has “no plan to make any changes lightly” and demands “clear understanding and full compliance” from the industry, the government said in a statement on its website after Sunday’s meeting, which the chief of its gaming regulator also attended. The government “regretted” certain opinions about its gaming and labor plans, it added without directly referencing Wynn’s remarks.

The city has powers to enact policies aimed at broadening the economy and developing Macau into a world tourism center, according to the statement. China’s president Xi Jinping in December ordered the city to diversify its economy from casinos, on which it relies for about 80 percent of revenue.

Wynn Resorts fell 6.4 percent to $68.25 at the close in New York, while Las Vegas Sands Corp. lost 4.4 percent to $47.54 and MGM Resorts International was down 2.6 percent to $21. Wynn Macau shares slumped 4 percent at the close of trading in Hong Kong, the lowest in a week, while Sands China Ltd. declined 6.4 percent and Galaxy Entertainment Group Ltd. dropped 5 percent. The benchmark Hang Seng Index was little changed.

Uncertainty in Macau is complicating hiring decisions and could force casino operators to terminate employees, Wynn said in a post-earnings teleconference with analysts, during which he called the city’s gambling table cap “the single most counterintuitive and irrational decision that was ever made”.

The casino billionaire’s remarks came as Macau posted a 16th straight month of gaming revenue decline in September, its longest downturn on record as President Xi’s anti-graft crackdown and a slowing Chinese economy curbed high rollers traveling to the world’s largest gaming hub.

Wynn Macau is planning to open a $4.1 billion resort in the territory on March 25. Its parent Wynn Resorts, the first of the large U.S. casino operators to announce third-quarter earnings, on Thursday posted revenue that trailed analysts’ estimates after a large drop in gambling in Macau.

The Parisian Macao tops out its iconic tower

The Parisian Macao resort reached one of its most significant milestones yesterday. Marked with the symbolic act of capping the dome and lantern structure, the moment also signaled the beginning of the tenure of the appointed president and chief operating officer for Sands China Ltd, Mr Wilfred Wong.

Mr Wong, who presided over the ceremony held yesterday at the construction site of the new resort, explained, “The Parisian Macao, and in particular its Eiffel Tower, is certain to be a landmark presence on the Cotai Strip, and an iconic addition to the city’s skyline.”

The new president and chief operating officer for Sands China Ltd took this opportunity to inform the public that he will begin work with the company from November 1. He highlighted in his speech the European style and the uniqueness of the integration between the company’s resorts, asking, “Where else but here could you have lunch alongside the serenading gondoliers plying the picturesque canals of Venice, and then have dinner at an authentic French bistro, before enjoying breathtaking views from Cotai Strip from the Eiffel Tower?”

Following the announcement of Sands China’s aim to recreate some of Europe’s most famous iconic locations and structures in Macau, the ceremony itself reflected a blend of Eastern and Western cultures, incorporating both the typical Southern Chinese Lion Dance and the distinctive French cabaret dance, the Cancan. A fashion show was also held, featuring some of the team members’ uniforms for the new resort, which also merged the French and Chinese cultures.

Expected to open in the second half of 2016, The Parisian Macao will feature an integrated resort with about 3,000 rooms and suites, as well as conference rooms, restaurants, shops, a spa and health club, a children’s club, two observation decks and a pool deck, including Aquaworld – a themed water park aimed at mostly business, leisure and family travelers.

Once it has been completed, The Parisian will increase the visitor capacity of Sands China in the Cotai area to 12,000 rooms and suites and 800 duty-free shops.

As Mr Wong explained, the major points of interest around The Parisian and its iconic half-size replica of the Eiffel Tower do not end with the structure itself, but continue in the events that are expected to take place. Raising the veil, Mr Wong highlighted the daily musical light show that will illuminate the tower, as well as the many upcoming shows and events. RM