Shares of Wynn Resorts Ltd. WYNN slipped to a 52 a week low of $97.89 on Monday, Jun 1 after the Macau Gaming Commission reported 37.1% decline in gross gaming revenues (GGR) for the month of May. This marked the twelfth straight month of decline. Also, Macau GGR revenues fell in double-digits for the ninth consecutive month.
Macau is a key operating region for this leading casino operator. With the current decline, GGR in Macau for the first five months of 2015 has plummeted 37% year over year. The slowdown reflects a nationwide crackdown on corruption in China. This compelled Macau officials to impose strict restrictions on VIP gamblers to stop billions of dollars from being siphoned off illegally from mainland China to Macau.
Restrictions like limitation on the use of state-backed payment processor UnionPay made it harder for players to obtain cash to gamble. Tighter restrictions on visas and the smoking ban in casinos worsened the situation further. Moreover, high-stake gamblers are curtailing spending amid a cooling Chinese economy, which has added to the woes. Consequently, it has lowered footfall at local casinos. Notably, Wynn Resorts' share price has plunged 51% since Jun 2014.
In fact, owing to the weak performance in Macau, Wynn Resorts has been posting sluggish results over the past few quarters. This Zacks Rank #5 (Strong Sell) company has missed the Zacks Consensus Estimate for earnings as well as revenues in the last two quarters.
Other stocks that have been bearing the brunt of the Macau slump include Las Vegas Sands Corp. LVS, Melco Crown Entertainment Limited MPEL and MGM Resorts International MGM.
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