Macau Losing Streak Extends To 16th Month

·         Macau gaming revenue in September declined 33.0 percent year-over-year.

·         News of potential junket embezzlement was a primary negative catalyst in September.

·         Macau gaming stocks are trading slightly higher following the release of September revenue numbers.

According to data released by the Macao Gaming Inspection and Coordination Bureau, gaming revenue in the month of September came in at 17.1 billion patacas, about 33.0 percent lower than September 2014.

Shares of Melco Crown Entertainment Ltd (ADR) MPEL Las Vegas Sands Corp. LVS, MGM Resorts International MGM and Wynn Resorts, Limited WYNN all opened slightly higher on Thursday following the news.
 

Has Macau Found A Bottom?
September marks the 16th consecutive month of negative gaming revenue growth in Macau, but shareholders of Macau names are hoping that the year-over-year declines have now stabilized.


February marked the high point for gaming revenue declines so far in 2015 at -48.6 percent. Since February, year-over-year declines have been trending lower on easier comps. However, the September GGR total marks a new multi-year low for Macau.

The Bad News Barrage
Macau has seen a seemingly constant stream of bad news over the past year. Last year, the Chinese government announced a crackdown on corruption in Macau.

Increased government scrutiny coupled with a weakening Chinese economy led to a major falloff in VIP gamblers.

In September, headlines of potential junket embezzlement of up to $258 million dollars had investors worried about even more government regulation down the road.

Stocks Hurting
The junket theft news is just the latest bad news for Macao investors.

Shares of Las Vegas Sands, Wynn and Melco Crown Entertainment all hit new multi-year lows in September.

Disclosure: The author owns shares of Melco Crown Entertainment.