Las Vegas Takes Hit As Soft Chinese New Year Weighs on Baccarat Revenue
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Casino operators on the Las Vegas Strip reported a slowdown in gaming revenues for the first quarter, according to data released by the Gaming Control Board.
Revenues fell 4% year-over-year for the first quarteras a soft Chinese New Year dragged down results. Weakness was particularly notable in baccarat, which is a favorite of Asian gamblers. Revenues ex-baccarat, were up 10%. Gaming revenues for local customers were up a solid 7%.
In its first-quarter earnings report, Las Vegas Sands also noted weakness in Baccarat, and said that more VIP customers were continuing their long-term shift to Macau over Vegas.
"Our Asian customers may opt to stay in Macau," said Rob Goldstein, President and COO of Las Vegas Sands on the April 17 conference call. "When you look at our campus in Macau, it's so damn compelling. What they're offering, I do think you're going to see a challenge to Vegas baccarat growth potential."
While Macau has been taking share from Vegas, the gaming center has also reported weakness in revenues from VIP customers as the slowing Chinese economy hits the highly cyclical gaming industry.
"Our lower estimates are driven by weaker VIP and premium demand amid heightened risk to macroeconomic outlook in China," noted UBS analyst Robin Farley.
Gaming giant MGM Resorts is set to report its first-quarter results after Monday's closing bell. Earnings are expected to fall 30% year-on-year alongside the general industry slowdown. Analysts surveyed by Bloomberg are expecting adjusted earnings of $0.21 a share on revenue of $3.13 billion.
