Macau Casino Changes Reverberate to Las Vegas
The large Las Vegas casino operators have held their Macau interests as insurance against the increased competition and economic doldrums experienced by their Vegas mega-resorts. But now, bad news from Macau has left Las Vegas Sands, MGM Mirage, and Wynn Resorts in precarious positions.
Macau news agencies reported yesterday that, for the first time since the dissolution of Stanley Ho's gambling monopoly, monthly gaming revenue in Macau declined from the previous year.
September 2008 revenues were approximately $900 million, down three percent from September of 2007. The drop in revenue was attributed to the new visa policy of the Chinese government, which has limited the number of visits to Macau available to mainland residents.
The restriction, which allowed only one visit every two months, becomes even tighter this month, reducing trips to one every three months. Analysts say that this may lead to a continued decline in casino revenue.
The Chinese government has been determined to slow the breakneck pace of growth in Macau, which has stressed infrastructure beyond limits and created inflation and labor supply problems.
Stocks of the big American casino companies dropped at the news. Las Vegas Sands lost almost thirteen percent of value, MGM Mirage declined eleven percent, and Wynn Resorts fell almost five percent.
MGM and Las Vegas Sands are considered by market analysts to be in danger of undercapitalization and liquidity problems caused by financing difficulties concerning ongoing projects, and thus more greatly harmed than Wynn by the news.
