Macau casino operations continue to prosper

The Bedford Report examines the outlook for companies in the Resorts and Casinos Industry and provides equity research on Las Vegas Sands Corporation and Wynn Resorts.

Macau's Gaming Inspection and Coordination Bureau reported earlier this month that gambling revenue on the small island jumped 39 % to us$ 2.6 billion in September, reflecting continued growth in the world's largest gambling market despite plunging casino stocks. September's revenue figure was expected to fall short of August's record us$ 3.1 billion due to seasonal factors.

Asian strong growth in the gaming industry stands in contrast to the Las Vegas Strip, which is now suffering the effects of the global downturn. Casino stocks have had a fairly difficult two months on fears that a potential slowdown in the Chinese economy might affect companies' operations in Macau.

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Sands saw its net Chinese income grow 100% in the second quarter; us$ 1.21 billion in Macau revenue dwarfed the mere us$ 332.5 million from its Las Vegas operations. Wynn Resorts said stronger gambling business in Asia helped the company more than double its second-quarter net income. On an adjusted basis, knocking out special charges, the company would have earned us$ 1.60 a share, up from 52 cents.

Net revenue at Wynn Macau was us$ 976.5 million, up 36.7% year over year, primarily driven by a significant increase in the table games turnover in the VIP segment, which rose 50.6% from the prior-year period to us$ 32.7 billion.