Market Overview

Macau Gaming Revenue Up 12%, but Misses Expectations

According to Macau's Gaming Inspection and Coordination Bureau, June gaming revenue rose 12% versus the prior year period. Total revenue for June was $2.92 billion. Overall, these figures fell below Wall Street estimates.

In May, gaming revenue was up just 7%. Moreover, for the first 6 months of the year, revenues in Macau were up 20% from the same period last year.

The region is the only place in China where gambling is legal, and revenues dwarf those of the Las Vegas Strip by a multiple of five. A number of American gaming companies rely on revenue growth in Macau to offset disappointing revenues from their Las Vegas operations, which continue to be effected by the housing bust and subsequent recession. Wynn Resorts (NASDAQ: WYNN) shares lost a little more than 1% on Monday while competitors MGM Resorts (NYSE: MGM) and Las Vegas Sands (NYSE: LVS) were down around 0.5% and 0.3%, respectively.

Benzinga recently highlighted research from Wells Fargo suggesting that the Chinese government may be tightening visa issuance to Macau. The firm's analyst, Cameron McKnight, also speculated that credit limits on a popular credit card, the China UnionPay card, could be reduced. These factors could be responsible for the lighter than expected revenues in the region for June.

Bank of America Merrill Lynch analyst Billy Ng wrote on Monday that temporary issues, such as the European soccer tournament, bad luck at the casino tables, or a typhoon which struck on June 29, could be responsible for the less than expected revenues. Alternatively, this could also be a result of structural issues within the Chinese economy, according to the analyst.

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