Casino
stocks are selling off in mid-morning trading on news out of Macau that Chinese travelers decided not to try their luck over
the Golden Week holiday.
Golden Week is a seven-day national holiday in China that occurs twice a year. The October Golden Week celebrates the National
Day of the People’s Republic of China.
Many Chinese citizens take the opportunity to travel to visit parents, sight-see and even gamble. However, the Macau tourism board has reported that Golden Week travel to the fell 2
percent compared to last year.
The number of Macau visitors from Oct. 1 to Oct. 4 dropped to 468,628, while the number of tourists from mainland China fell 5.1
percent to 363,435.
Stocks Take A Bit Of A Hit
Shares of U.S.-listed Macau casino operators Melco Resorts & Entertainment Ltd(ADR) (NASDAQ: MLCO), Wynn Resorts, Limited (NASDAQ: WYNN), Las Vegas Sands Corp. (NYSE: LVS) and MGM Resorts International (NYSE: MGM) all sold off between 1.2 and 2.6 percent following the news.
A disappointing Golden Week has been a rare bump in the road for Macau casino operators over the past year. After two years of
declines following a government crackdown on corruption in Macau, gross gaming revenues have now risen for 14 consecutive months.
Gaming
revenue jumped 16.1 percent in the month of September, within analysts’ expected range of 11 to 17 percent.
While the U.S. is dealing with its own hurricane problems, Macau was hammered by two typhoons in August that caused widespread
flooding.
Disappointing Golden Week numbers will likely dampen market expectations for October gaming revenue in Macau. The full-month
revenue report is expected out on Nov. 1.
Disclosure: The author is long MLCO.
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