Then, in 2017, Macau gaming revenues returned to growth in a big way (+19%), and casino stocks roared higher. Now, in 2018, the Macau rebound has lived on.
Macau has been getting a lot of attention due to crime in connection with casino operations and despite additional measures, taken by law enforcement, the situation is only getting worse. To attest to that, there has been another case which left The Plaza Macao’s employees terrified and in need of medical attention.
What led to their state were two masked individuals, armed with pepper spray who committed an act of robbery, taking off with chips approximately worth $394,900. Even though at the moment, there is no news about the two culprits being caught or their identity revealed, the fact remains that they’ve taken a bold move by going off with chips since trying to cash them out will set off the alarm and draw unwanted attention their way.
Investigation in Progress
Early in the morning of May 25, a masked duo entered The Plaza Macau premises, inflicting injuries to a security guard and a dealer. Next, they’ve moved onto the chips, stashing them from the high-limit gaming lounge. After that, they’ve left the scene of the crime in a taxi, and according to law enforcement, there hasn’t been a significant development in the investigation.
The Plaza Macau is listed among five Sands China Limited venues in Macau, located in the Four Seasons Macao hotel. Within its 108,000 sq ft casino, the venue includes 180 slot machines as well as 140 gaming tables and it is one of the largest casino in the Asian Sin City.
In relation to the heist, Sands China Limited, a subsidiary of prominent casino and resort company, gave a statement elaborating that the case in question is being handled by the local law enforcement. Also, according to the statement, the authorities will have their full support during the investigation.
The employees who suffered the unfortunate incident have been given proper medical care and the company is keeping tabs on their state. For the company, the safety of their staff is very important and they don’t take it very lightly.
Prior Incidents
It’s been revealed that before the pepper spray heist, there has been another alarming incident at the Plaza Macao. In fact, it happened just recently, on May 18, involving 4 Chinese nationals being stabbed. In the end, there was one fatal outcome with local authorities denying any connection to gambling despite being placed at the footbridge, connecting the Plaza Macao with Sands Cotai Central integrated casino resort.
Before the most recent act of crime, casino representatives held a meeting, trying to figure out the way how to shorten reaction time in situations alike. In addition to casino officials, the local Gaming Inspection and the police were present at this gathering.
However, due to the newest robbery, it appears that there is a lot of work to be done in order to stop similar criminal advancements. Even though there is no outright logic in stealing chips since it’ll prove to be hard dispensing them with profits and not being detected while doing so, the pair responsible for the theft might have other agenda with more complex planning. On the other hand, it doesn’t appear so.
America's big casino companies are rolling the dice far from the Las Vegas strip. Sin City's real gamble is in China.
The majority of the business for these 'Las Vegas' companies now comes from Macau, the only city in China where gambling is legal.
Consider the Las Vegas Sands. Its famous Vegas properties such as the Venetian and the Palazzo now make up a mere 10% of its sales, according to the company's latest earnings report. It's a similar story for Wynn. Its Vegas operations drive less than a third of the company's entire business.
Even MGM Resorts, owner of the Bellagio, MGM Grand and Mandalay Bay, is China focused. Its Macau business now takes in more cash than those three Vegas casinos combined.
'Macau is larger than Vegas, larger than the whole U.S. gaming market,' says Adam Fleck, an analyst at Morningstar Research.
China's gambling mecca: With a population around 600,000, Macau is the fastest-growing city in the world, according to the Brookings Institution, and its casino industry is roughly seven times the size of Las Vegas'.
But China isn't a winning bet right now.
An anti-corruption campaign by the Chinese government, travel restrictions and a smoking ban on casino floors are keeping gamblers with deep pockets away from Macau for now. China also just reported its slowest year of economic growth in decades, adding to a 'perfect storm,' of bad events in Macau, analysts say.
The Macau slowdown is hurting Vegas veterans -- and investors in these companies. The stocks are down sharply in the past year.
'Wynn and Las Vegas Sands have been betting big on Macau so that's why the stocks have down lousy,' says John Staszak, an analyst at Argus Research, who has a hold rating on Wynn.
Investor are losing: Although Las Vegas Sands' reported record profits on Wednesday, its stock is down 30% over the past year. Sands reported a double-digit drop in revenues in its Chinese branch. The boost in overall profits came from cost-cutting measures.
Macau Hotels And Casinos
Wynn(WYNN) will report its latest results Tuesday, and it's not expected to be a good story. The stock is down 26% in the past year. Wynn's casinos in Macau make twice as much in revenue as its Las Vegas ones. That's why it's very bad news for investors that Wynn's Macau branch is projected to report a 25% sales drop for the fourth quarter, according to analysts estimates.
But as the saying goes, the house always wins.
Macau Casino Guide
Analysts say that casinos in Macau will be a long-term winner. The Chinese government has only granted six gambling licenses to casino companies, which reduces the risk of future competition. Once the casinos offer more entertainment activities outside gambling, they will be become even bigger cash cows.
'There's a very long-term secular growth story here,' says Fleck, who has a buy rating on Wynn. 'We think that the [casino] names look attractive right now, look undervalued.'