Las Vegas vs Macau: second quarter 2015 casino results
It has been second quarter reporting for 2015 and we have at New Casinos have been focusing on the two big casino towns, Macau and Las Vegas. It was not many years ago that land based casinos in Macau where very successful with a much higher turnover than the Las Vegas casinos. But so far this year it seems that the operators of casinos in Macau have run out of luck. Credit problems in China, harder monitoring of money transfers for tracking money laundering for high rollers, visitors visa limitations to the Chinese visitors, smocking regulations in the casinos and last but not least, a broad economic slowdown in China are responsible for Macau’s gaming revenue decline of 37 percent to 15.2 billion US dollar in the first half of this year.
How is the casino shares in the United States?
United States’s economy is doing well and Las Vegas feels like it could soon be on the move again. New Casinos will look at the 3 large land based casinos, MGM Resorts, Wynn Resorts and Las Vegas Sands.
MGM Resorts (MGM) beat analysts’ expectations with revenues of 17 cents per share, against the expected 11 cents. Revenues went down 7.6% to $ 2.39 billion but was slightly better than the expected revenue of $ 2.37 billion. It was particularly investments in Macao who pulled down the performance of MGM Resorts, where net revenue was down 33%.
Wynn Resorts (WYNN), accounted for a relatively poor second quarter report last week. Revenue was on “modest” $ 1.04 billion, down 65% from last year. On 22th July so did the Las Vegas Sands (LVS) report, the world’s largest casino operator, a mediocre result. Revenues fell by 29.4% from last year and landed at $ 2.92 billion. Also here, Macau is contributing to the negative earnings trend.
Several investors have noted that US casino stocks have a low valuation and there may be room for a rebound in the stock prices. Some good news may came from Macau in the near future. First, the rules on smoking bans may be eased in several gaming floors, which is expected to increase the revenues for the region’s casinos. Second, Chinese passport holders may stay for 2 days longer and could return to Macau after 30 days instead of 60 days.
There are some similarities for both Las Vegas and Macau
•Both are known as gambling meccas.
•Las Vegas was the first and Macau has the biggest gaming revenues.
• Both towns have lots of entertainment, even though Las Vegas has a larger range of other forms of entertainment that the movie “The Hangover” enough testifies.
• The very same casino brands are available in both cities: Venetian, MGM Grand and Wynn.
There are some differences between Las Vegas and Macau
• Macau has run out of land to expand. In Las Vegas, there are plenty of land to expand.
• Many Las Vegas fans who love burgers and fries certainly do not complain, but when it comes to high-class restaurants with world famous chefs, Macau is a frontrunner. One example is the French Robuchon au Dôme, one of Asia’s best restaurants with 3 Michelin stars. If you want to experience a bit of the Portuguese side so it is dessert Pastel de nata that you should try in Macau.
• The culture differ radically. Las Vegas is an example of an American entertainment metropolis where everything is relatively new. Macau was instead a Portuguese colony until 1999. The latter has strong European influence when it comes to t. Ex Neo-classical architecture.
• People love to drink alcohol in all its forms in Vegas, while the high roller casino players in Macau rarely mix alcohol and gambling. It serves instead much tea or coca cola on Macau’s casinos.
• Las Vegas is known for its slots, while the Baccarat and Sic Bo is a unique game in Macau. Both Blackjack and Roulette, however, the truly great games in the latter destination.
Casinos in USA vs Macau
The number of casinos in the United States is many times more than in Macau and real casinos in the United States has so far bigger selection of games. It is almost only American casinos at the top when it comes to land based casinos with the most slot machines. In Macau, people are more interested in table games such as blackjack and other games of skill, but also in roulette. In Asia are also 14 of the 15 largest land-based casinos measured by the number of table games. So in short you can say that slot machines are by far the largest in Las Vegas and when it comes to table games it’s Macau by far the largest.
Over the next 3 years many spectacular new land based casinos will be build. Many are in Asia, but also the United States and Europe have some new casinos in their pipeline. What you must not forget, however, that that new online and mobile casinos are significantly more than the land based casinos. On average, the payout ratio is between 92-96% for the online casinos but only 70-75% for the land based casinos.