Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

No hotshot gambler tells epic stories about losing money. It's the winning hand people want to hear about.

But blocking out memories of preventable miscalculations also blocks out learning from them. That's happening with Macau's casino operators, which are enjoying a resurgence of high rollers and forgetting the trouble caused by over-reliance on high-stakes players two years ago, when Xi Jinping's corruption clampdown struck the world's largest gambling hub.

Game On
Shares of Macau's casino operators are outperforming the broader Hong Kong market
Source: Bloomberg

Investors are rewarding their behavior: Macau gaming stocks have soared past Hong Kong's Hang Seng Index, which is hitting 10-year highs.

VIP Treatment
Despite pledges from casino operators to attract more mass-market customers, the growth in gaming revenue is coming chiefly from high rollers
Source: IMC and Bloomberg Intelligence

The 14 months of year-over-year growth that pushed casino revenue in October to the highest level in three years followed a two-year plunge that ravaged the only place in China where casino gambling is legal. 

What happened to those pledges Las Vegas Sands Corp., Wynn Resorts Ltd. and their competitors made to increase the penetration of mass-market visitors coming to Macau for family-friendly revenue-generating activities like dining out and shopping, rather than for money laundering or evading Chinese capital controls?

Well, the talk is still there, but actions and data tell a different story. Take MGM China Holdings Ltd., which engaged five junket operators to bring high rollers to the MGM Cotai resort, to launch next year, and will open a new VIP room at its existing Macau resort in response to strong VIP growth. Sands, too, is spending $1.1 billion to transform its Sands Cotai property into a London-themed resort, another way to attract higher-end customers.

Status Quo
The percentage of non-gaming revenue has risen for some operators, but still remains a small portion of the casino business
Source: Bloomberg

Regulators are paying attention, according to Bloomberg's Daniela Wei. Macau's Gaming Inspection and Coordination Bureau director Paulo Chan warned Tuesday of heightened scrutiny of promoters that ferry rich gamblers into casinos and take a cut of the winnings. Come January, the territory's government will tighten standards for the junket operators. They'll also also review gaming laws to make sure casinos follow through on commitments to increase non-gaming operations, he said.

A more important deadline is the expiration of the gaming licenses without which casinos can't operate. The 20-year licenses of Melco Resorts & Entertainment Ltd., Sands, Wynn and Galaxy Entertainment Group Ltd. run out in 2022, marking the first major renewal process since Macau ended Stanley Ho's 40-year gaming monopoly in 2002. The SJM Holdings Ltd. and MGM China concessions expire in 2020. It wouldn't be surprising if Beijing became less accommodating of the headache-inducing foreign-run casino operators.

Political jockeying is underway. So it's worrying that casinos seem to be distracted by a cash infusion from wealthy patrons returning to Macau. The companies' actions in the next few years could determine their prospects for the next 20, and it will take more than talk of mass tourism to placate Beijing.

Investors may be able to cash in as casinos sop up a revenue windfall from the biggest gamblers, but their owners should be playing a longer game.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in Hong Kong at

To contact the editor responsible for this story:
Paul Sillitoe at