Wynn, Adelson Are Dealt a Revenue Miss in Wagers on MacauBy , , and
China’s anti-corruption crackdown is felt in gambling haven
As casinos try Ferris wheels and Broadway, competition grows
Steve Wynn’s and Sheldon Adelson’s new bets on Macau, the world’s largest gambling hub, are still awaiting their big payoffs.
Casino revenue in Macau missed analyst estimates in June, amid concerns of tightening regulation in the only place in China where casino gambling is legal. While the results marked the 11th-straight month of increased revenue, the industry is still recovering from a two-year slump triggered by a crackdown on corruption on the mainland.
Gross gaming receipts in June rose 25.9 percent to 19.99 billion patacas ($2.49 billion), according to data released by Macau’s Gaming Inspection and Coordination Bureau Saturday. That compares with the median estimate for a 30 percent increase in a Bloomberg survey of 11 analysts and follows a 24 percent jump in May.
New casinos opened by companies including Wynn Resorts Ltd. and Las Vegas Sands Corp., Adelson’s company, are wagers that revenue will keep accelerating amid increasing competition. Casino operators, prodded by a government dependent on the revenue Macau pulls in, have begun to offer more non-gambling attractions, from Broadway-style shows to a Ferris wheel, to diversify the tourism market.
Las Vegas Sands shares have risen 19.2 percent this year though June 30. Wynn Resorts was up 55 percent and MGM Resorts International, which owns one casino and is building another in Macau, was up 8.5 percent. Bloomberg Intelligence’s index of Macau gaming stocks rallied 26 percent this year through Friday.
Policy risks remain, as Macau’s government and Chinese authorities put in new regulations to deter capital outflows from the mainland, including facial recognition technology on automated teller machines to curb money laundering. The arrest by police of 17 suspects involved in proxy betting in mid-June also suggests stricter enforcement of regulations.
Casinos also face a setback in expansion attempts in China, after a Shanghai court in June convicted 19 Crown Resorts Ltd. current and former staff for illegally promoting gambling on the mainland. The convictions coincide with a planned new wave of Asian casinos, from Japan to Australia, that are poised to make a fresh push to attract business from China.