U.S. Casino Shares Fall as Macau Gaming Revenue Seen Slowing

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U.S. casino operators with properties in Macau dropped in trading Monday, reversing gains last week, after several analysts said gambling revenue this month in the Chinese territory will be below their initial estimates.

Las Vegas Sands Corp. fell 5.1 percent to $52.21, while MGM Resorts International slid 5.5 percent to $19.17 at the close in New York. Wynn Resorts Ltd. lost 6.2 percent to $102.40.

Wells Fargo & Co. analyst Cameron McKnight said gross gaming revenue in Macau would be down as much as 38 percent in June from a year earlier, compared with his earlier estimate for a drop of at least 30 percent. He cited “weaker demand” following the Golden Week holiday. David Bain at Sterne Agee & Leach Inc. revised his estimate to a drop of 46 percent from a previous prediction of down 33 percent to 38 percent.

Signs of growth in May in the world’s largest gambling hub helped push the Bloomberg Intelligence Macau/China Gaming Index to an almost two-month high on June 5. Yet, that optimism was short-lived. Daily gross gaming revenue fell 24 percent during the first week in June from its average in May, Nomura Securities analyst Harry Curtis wrote in a note June 8.

“We reiterate our view that gaming demand in Macau remains weak and won’t improve unless tight visitation policies and the corruption crackdown both ease, neither of which is likely in the intermediate term,” Curtis said.

Shrinking spending among Chinese consumers helped push gaming revenue down 37 percent in Macau in the first quarter, Bloomberg Intelligence analysts Tim Craighead and Margaret Huang wrote Monday, reflecting a slump in the “once-booming mass market.”

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