Gaming | Macau remains attractive for investment

People take photographs outside the Venetian Macao resort and casino, operated by Sands China Ltd., a unit of Las Vegas Sands Corp., left, in Cotai, Macau, China, on Saturday, Aug. 29, 2015. Macau is scheduled to release second-quarter gross domestic product figures Aug. 31. Photographer: Jerome Favre/Bloomberg

Macau’s casino table games generate nearly double the revenue of their Las Vegas counterparts despite the gaming slump that has afflicted the city, according to a report from financial services company The Motley Fool.
Together with slot machines, which in the MSAR generate more than double the revenue of comparable Las Vegas machines, gaming facilities in Macau remain a much more attractive investment opportunity for casino operators.
Macau’s gaming market generated USD29.9 billion (MOP293 billion) in total revenue over the past year, down from $45.2 billion (MOP361 billion) in 2013. Nevertheless, it significantly surpasses the $6.3 billion (MOP50 billion) raised by the Las Vegas Strip.
Wynn is just one of several international operators in Macau that are continuing to prioritize new resorts in the territory, and is expected to open the Wynn Palace in the second half of the year.
According to The Motley Fool’s comparisons between a Wynn resort in Macau and another in Vegas, slot machine winnings per unit per day in the MSAR amount to $710 (MOP5,676) while those of Vegas stand at a mere $289 (MOP2,310).
Moreover, table game winnings per unit per day in the Wynn resort based in Macau ($11,092/MOP88,673) easily trump those of its Las Vegas resort ($5,792/MOP46,303).
The MSAR’s success, according to the financial services analyst, lies partly in the city’s ability to regulate and limit the supply of gaming tables. This results in increased barriers of entry to the market and reduces competition, thus helping to protect long-term profits.
Wynn Macau, Sands China and MGM China are all preparing to complete their latest resorts in the MSAR, along with Melco Crown’s most recent property, which will lead to a supply increase in the next few years.
However, The Motley Fool asserts that there will be a cap to market entry in the long-term, meaning that growth will likely be restricted to existing resorts in the region. This will put operators in “a strong position to reap the benefits of the highly profitable gaming market.” DB