Sands, MGM and Wynn Shares climb on Macau growth

2012-12-14

Reading time 1:35 min

(Macau).- MGM Resorts International, Las Vegas Sands and Wynn Resorts could benefit on new reports confirming resurgence in gambling in Macau and Las Vegas. The top three US casinos operate resorts in Macau, the area near Hong Kong set aside by the Chinese government for casino gambling and the only legal casino gambling region in the country.

Macau attracts middle-class gamblers from China and high-roller "VIP" gamblers from around the globe.

Stern Agee in a report Tuesday said Macau gaming revenues so far this month have been higher than expected. Analyst David Balu said in a client note that Macau gross gaming revenue, or GGR, jumped 27% in the first 10 days of December.

Macau officials reported on December 3 that gambling revenue in November was us$ 3.5 billion, the highest single-month revenue figure ever recorded. MGM shares climbed 3.2% to 11.27 in Wednesday afternoon trading. Its stock price has risen about 27% from a low of 8.83 on August 3.

Sands lifted 1.5% to 45.20. Last month Sands issued a us$ 2.75-a-share special dividend, for a total of us$ 1.2 billion, payable December 18. The company went ex-dividend this month as it tries to raise cash, in part to build a Las Vegas Strip-like gambling complex in Spain.

Wynn shares were up 3% at 113.07. Wynn, like MGM, has benefited from stronger growth in Las Vegas. Last quarter, Wynn's revenue from its Vegas casinos jumped 11.8% as more-confident Americans visited its Wynn and Encore resorts.

Casino game machine makers Multimedia Games and rival Bally Technologies each rose less than 1%. Casinos could double their winnings if gambling in Las Vegas continues to recover too.

Last Friday, the Nevada gaming board said statewide gambling revenue rose 1.8% to us$ 978.8 million in October vs. us$ 960.7 million a year earlier. In Las Vegas and surrounding communities, gambling revenue climbed 2.8% to us$ 859.9 million. Meanwhile, MGM on Tuesday filed papers to sell us$ 1.25 billion in senior notes to refinance debt.

Also Tuesday, MGM made a pitch to Springfield, Massachusetts, officials for the sole western Massachusetts casino license. MGM wants to build an us$ 800 million resort casino, hotel and entertainment complex on a 10-block site in downtown Springfield. Gaming officials will decide next year between MGM's bid and a competing one from a group led by Penn National.