Macau gaming revenues grow 42 percent in November

Macau gaming revenues grew 42 percent during November, boosting the prospects for Nevada casino companies operating in China.

The Macau Gaming Inspection and Coordination Bureau said Wednesday the region's casinos collected $2.13 billion in gaming revenue during the month, the second-highest month ever following October's $2.3 billion take. October's results were driven by the China National Day holiday.

Analysts thought the numbers benefited Las Vegas Sands Corp., which operates the Venetian Macau and Sands Macau; and Wynn Resorts Ltd., which owns Wynn Macau and Encore. MGM Resorts International owns 50 percent of the MGM Grand Macau.

"We believe these results are above expectations and confirm our belief that Macau gaming revenues will continue to be strong throughout 2010 from a year-over-year growth perspective, despite a modest cooling of the Chinese economy," Jefferies & Co. gaming analyst David Katz told investors.

Shares of Las Vegas Sands, Wynn and MGM Resorts rose.

Las Vegas Sands shares, traded on the New York Stock Exchange, rose 2.52 percent to close at $51.34, up $1.26. MGM Resorts shares, also traded on the New York market, increased 1.31 percent to close at $12.38, up 16 cents. Wynn, traded on the Nasdaq National Market, closed at $104.79, up $3.69, or 3.65 percent.

"Today's results were relatively in line with investors' expectations," Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said.

The official release indicated results by market share for the companies that operate casinos in Macau. Casinos owned by SJM, the company controlled by Hong Kong billionaire Stanley Ho, held 32 percent of the revenue, while Wynn Resorts had 17 percent. Las Vegas Sands held almost 15 percent and MGM Resorts had 11 percent.

Katz said the gross revenue results provided "a directional, qualitative data point."

Las Vegas Sands' market share declined from about 18 percent in October, primarily driven by lower-than-expected table hold, said JP Morgan gaming analyst Joseph Greff.

Wynn grew its market share from almost 14 percent in October. Greff said the increase was due to a combination of high table hold and strong volume.

"We believe the strength mitigates market concern on the potential negative impact of VIP commission competition," Greff told investors.

MGM Resort's market share and revenues from Macau have increased in recent quarters. The company is planning an initial public offering on the Hong Kong Stock Exchange, following similar moves by Las Vegas Sands and Wynn.

Hong Kong businesswoman Pansy Ho, the company's joint venture partner in Macau, told Reuters New Service during a business event in Hong Kong that she expects the IPO to take place sometime after Jan. 1.

MGM Resorts filed the paperwork for the IPO with the Hong Kong Exchange in September.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.