Las Vegas pandemic recovery continues to outpace Macau’s, casino analyst says

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Las Vegas, Nevada, and Macau, China are two of the world’s largest casino gaming centers. Both gaming destinations were hit hard during the COVID-19 pandemic, but the latest gross gaming revenue figures suggest the Vegas recovery continues to outperform struggling Macau.

Numbers: Many Americans think of Vegas as the number one gaming destination, but Macau’s gross gaming revenue eclipses Las Vegas. Unfortunately for Macau investors, its gross gaming revenue is still around 65% below 2019 levels, according to Bank of America analyst Shaun Kelley. Meanwhile, Las Vegas GGR is up 46% from pre-2019 pandemic levels, suggesting the worst of the pandemic is now in the rear view mirror.

Related Link: Analyst Reports ‘Increase’ in Online Sports Betting

On Tuesday, Kelley said he was modeling a 30% growth in the Las Vegas GGR in the fourth quarter for MGM Resorts International (NYSE: MGM) and 15% for Caesars Entertainment Inc (NASDAQ: CZR) relative to Q4 2019. Meanwhile, Kelley also models Macau GGR in Q4 as being down about 73% from 2019 levels for Las Vegas Sands Corp. (NYSE: LVS) and down 75% for Wynn Resorts, Limited (NASDAQ: WYNN).

Headwinds in Macao: In addition to weak gaming revenues, Macau is also suffering from negative investor sentiment after the recent arrests of 10 casino managers.

“We are also adjusting our models to reflect the closure of VIP rooms in 2022, which WYNN has indicated is coming out immediately and LVS / other operators are likely to recall significantly,” Kelley said.

Benzinga’s point of view: While Macau is struggling, investors in games can play it safe by betting on casino stocks with little or no exposure to China and US stocks from high-growth online sports betting and iGaming. Based on the latest figures from Bank of America, Projects Inc. (NASDAQ: DKNG), MGM and Flutter Entmt ADR (OTC: PDYPD) subsidiary FanDuel are the three clear leaders in national market share in OSB and iGaming GGR handles.

Photo by Grant Cai on Unsplash


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