For much of 2019, gambling revenue in Macau has been dropping. That trend appears to be changing. Gross gambling revenue has been increasing here for the past two months. As a result, US casino stocks are performing better, as well.
It’s a great sign for both Macau and casino operators in the city. Now is the perfect time to look at why this small territory is beginning to bounce back. We’ll also talk about some of the major investments coming here in the future.
Macau’s Gaming Revenue Finally Starting to Increase
As we’ve already mentioned, 2019 hasn’t been a great year for Macau. For months, gambling revenue here has been on a steady decline. This is mostly due to lower numbers of VIP gamblers playing inside the city’s casinos.
Chinese-US trade battles have hurt China’s economy. As a result, more Chinese gamblers are choosing to hold onto their money. Despite many new investments into Macau, including a bridge connecting it to the mainland, revenue here continued to drop for the first four months of the year.
That trend is finally changing. In May and June, gross gambling revenue here has increased. June proved to be the most successful month of the year for casinos. Overall, gambling revenue reached $2.96 billion last month.
This represents a 5.9% year-on-year increase from the year before. It’s clear that things are turning around in Macau. A number of major US casino stocks are now benefiting from Macau’s revenue boost.
US Casino Stocks Rise Alongside Macau
Some of the top US casino companies operate casinos in Macau. Fortunately for these companies, many of their stock prices are increasing. It makes sense, as revenue earnings in Macau add money into these companies portfolio.
Wynn Resorts is experiencing the biggest stock jump. As of today, this company’s stock price jumped by 7.2%. Las Vegas Sands saw a massive increase of 4.6% in their stock price. Caesars Entertainment, which recently merged with Eldorado Resorts, had a stock price increase of just 1%.
Macau casino operators stock, as a whole, increased by 7.5% in June. It has to be a major relief for these companies, some of which are investing heavily into this city right now.
Major Investments Coming to Japan
For months, gambling analysts begin to speculate whether or not Macau was falling to nearby countries such as the Philippines and, eventually, Japan. The fact that revenue is increasing here once again is squashing these theories. Macau remains the most lucrative gambling destination in the world.
To their credit, many US companies are continuing to invest here. Las Vegas Sands is currently working on a new $2 billion project in the city. Wynn Resorts opened a brand new casino-resort here in 2016 and continues to pour money into renovations and new venues.
Of course, Japan remains the most exciting new casino destination. The companies that we just mentioned, along with MGM Resorts and Mohegan Gaming & Entertainment are all working hard to break into this country. The first Japanese casino licenses will be handed out in mid-2020.
US casino stocks are clearly benefiting from Macau’s revenue increase. Hopefully, gross gaming revenue will continue to increase here for the remainder of 2019. How the Japanese casino market will affect this city is not yet known.
Will casinos here continue to see revenue increases? How will competition from other countries begin to affect Macau? Stay tuned for updates in the near future!