A report that the world’s gambling mecca, Macau, had experienced a year-over-year increase in revenue of “only 7 percent,” caused the shares of popular gaming companies to get hammered.
Within hours of the announcement, the shares of Wynn Resorts Ltd. (WYNN), MGM Resorts International (MGM), Las Vegas Sands Corp. (LVS) and Melco Crown Entertainment Ltd. (MPEL) were bleeding drastically.
But, the despair was brief.
It lasted only until an analyst at Deutsche Bank noted that an identical situation developed in 2011 and it was due to the day on which the Chinese New Year began.
This year, it was Jan. 31 while last year it was on Feb. 10.
The analyst explained that traditionally VIP gamblers left Macau about a week before the Lunar New Year celebration began and returned right after the third day of the festivities.
That being the case, the analyst explained, look for Macau’s gambling numbers to mushroom, beginning in early February. It only took a day or two for the Macau gaming companies to recapture the share prices they had briefly lost.
The explanation gathered credence when Macau last week reported thousands of visitors had flooded the city, pushing prices to inflated levels, filling all the hotel rooms and crowding the casino floors.
On Monday, the Macau Government Tourist Office announced visitor arrivals numbered 1,054,183 during the period from Jan. 31 to Feb. 6, or the period described as “Golden Week.” The data provided by the hotel industry indicated high-end hotel occupancy had reached 94.4 percent, a year-over-year rise of 5.4 percent.
Celebrations included fireworks, lion dances and parades but the main draw was the casinos. Officials explained the casino migration was motivated by the feeling of many Chinese that their luck at the baccarat tables is strongest during this festive period.
It’s an attitude that gets a lot of support from the casinos whose bottom line has come to rely on strong baccarat play.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].