Wynn Resorts and MGM Resorts Shares Fall as Macau Monthly Gaming Revenue Grew Just 7.3 Percent in May
07 Junho 2012 - 9:20AM
Marketwired
Gaming stocks after a strong start to the year have fallen sharply
over the last month as concerns of a global financial crisis
continue to grow. The Market Vectors Gaming ETF (BJK) -- which
replicates an index consisting of publicly traded companies engaged
in the global gaming industry -- has fallen nearly 15 percent in
the past month. The Paragon Report examines investing opportunities
in the Resorts & Casinos Industry and provides equity research
on Wynn Resorts, Ltd. (NASDAQ: WYNN) and MGM Resorts International
(NYSE: MGM).
Access to the full company reports can be found at:
www.ParagonReport.com/WYNN www.ParagonReport.com/MGM
In Macau, China's gambling Mecca, it was recently reported that
gambling revenue in May grew just 7.3 percent, the slowest rate of
expansion in nearly 3 years. Revenues totaled $3.3 billion in May,
the second-highest single-month total, but was nowhere near the
70-90 percent growth rates in 2010, or the most recent 22 percent
growth in April.
The recent slowdown in the Chinese economy has caused a decrease
in spending by billionaire "VIP" gamblers from mainland China. "The
VIP slowdown is more severe than expected but we need to wait until
around the fourth quarter for an easier year on year comparison.
Loosening in China will also help VIP but between now and then,
hang on tight," said Gabriel Chan, an analyst at Credit Suisse in
Hong Kong.
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Wynn recently announced plans to spend $4 billion on a casino
resort in Macau, which was considerably higher than analysts'
estimates. The new Macau resort will be Wynn's first on the Cotai
strip, Macau's version of the Las Vegas strip. Las Vegas Sands
currently has 3 resorts on the Cotai strip.
MGM Resorts International has two segments that are based on the
regions in which it operates: wholly owned domestic resorts and MGM
China. As of December 31, 2011, the Company operated 15 wholly
owned resorts in the United States. The company reported that for
the first quarter of 2012 consolidated net revenue increased 51
percent to $2.3 billion; excluding MGM China, net revenue increased
5 percent compared to the prior year quarter.
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