The former Portuguese colony of Macau generates about six times the gambling revenue of Las Vegas and now a Macau-based company is going after a piece of the action. U.S.-based casino operators are reaping some benefits, too.
The privately held Macau company, SJM Holdings Ltd., has announced a new partnership with Italy’s Gianni Versace SpA for a new hotel on Macau to be called the Palazzo Versace and to be designed by Versace fashion house. It is part of a $3.22 billion project that will ultimately include 700 gaming tables and 2,000 hotel rooms, and is scheduled to open in 2017.
U.S.-based casino operators Las Vegas Sands Inc. (NYSE: LVS), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM) already operate resorts and casinos in Macau and these companies would be much smaller without them.
At Las Vegas Sands, for instance, Las Vegas properties generated $346 million in second quarter revenues compared with $895 million at just one of its Macau properties. The story is similar at Wynn Resorts, where the company’s second quarter revenues in Macau topped $930 million compared with $401 million in Las Vegas.
At MGM, the company’s MGM China subsidiary reported revenues of $835 million and 51% of net income in the second quarter.
A new casino and resort on Macau are not depressing U.S.-traded casino stocks. Quite the reverse, in fact — all three have posted new 52-week highs today.
MGM International’s shares are up about 2.2% at $18.80 after posting a new 52-week high of $18.89. The 52-week low is $9.15.
Wynn Resorts has also posted a new 52-week high of $146.35 and is now trading up 2% at $146.28. The 52-week low is $102.29.
Las Vegas Sands posted a new 52-week high of $61.35 and is now trading up nearly 3.5% at $61.28. The 52-week low is $40.28.
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