Macao's Casino Stocks May Never Recover From COVID-19
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Entertainment venues in the U.S. have opened and are running full speed ahead. The COVID-19 pandemic has impacted business, but we don't see lockdowns and restrictions that bring entire operations to a screeching halt anymore. Same can't be said for China and Macao, where lockdown are still a regular occurrence. Casinos in Macau are coming off another lockdown.
In 2019, Macao's casinos generated $36.5 billion in gambling revenue. In 2021, the region's gambling revenues will be $10.8 billion. Through July of this year, revenue is down 46.4% from the same time a year ago.
Melco Resorts generates nearly all of its revenue from Macao. Wynn Resort has casinos in Las Vegas and Boston. EBITDA has declined dramatically. Las Las Sands and Melco may have negative EBTDA this year.
Macao is in a state of decline. Investors are trying to predict a recovery. Macao-centric companies are extremely high-risk. Melco Resorts and Las Vegas Sands are not worth buying. Wynn Resort is. The company has the diversity to survive the next few years, but without Macau it won't thrive.
