Wynn Falls After Analyst Cites Risk of Drop in VIP BetsChristopher Palmeri
Wynn Resorts Ltd. and its Macau unit led declines among casino operators with resorts in the Asian gambling hub after an analyst said reduced borrowing in China may lead to a drop in bets by high rollers.
Wynn Macau Ltd. fell 2.4 percent to close at HK$32.1 in Hong Kong trading, while its Las Vegas-based parent dropped 3.6 percent to $202.82 at the close in New York yesterday. Sands China Ltd. lost 1.2 percent, while its parent Las Vegas Sands Corp. declined 2 percent.
Credit growth is a leading indicator of so-called VIP betting in Macau casinos by six months to 12 months, according to Cameron McKnight, an analyst at Wells Fargo & Co. in New York. March data released yesterday showed new credit in China shrank 19 percent from a year earlier.
“Credit growth hasn’t yet bottomed, and we could see VIP growth meaningfully decelerate over the next six months,” McKnight said. He forecasts a 3 percent gain in betting by high rollers in the first half of 2014, compared with about 13 percent in the first quarter.
Wynn and Las Vegas Sands respectively generated 72 percent and 64 percent of 2013 revenue in Macau, according to data compiled by Bloomberg.
Shares of Hong Kong-based Melco Crown Entertainment Ltd. dropped 1.5 percent in the city, compared with a 2.4 percent decline in its U.S.-traded ADRs in New York yesterday.
Galaxy Entertainment Group Ltd. fell 1.4 percent and SJM Holdings Ltd. declined 0.4 percent in Hong Kong.