Mass market shows promise as the high rollers take a hit
If the stock market is any gauge (and that's debatable) then Macau's casinos have not just rebounded but are back in rip-roaring form.
Investors have displayed no difficulties in looking beyond the rather ugly headline numbers that came out this week - net losses for the quarter of US$87.68 million at Las Vegas Sands and US$33.81 million at Wynn Resorts - and have proceeded to send shares in Macau gambling companies soaring.
The market appears focused on increasing signs that things have bottomed out, and indeed it looks like Macau's worst months are behind it after casino revenue troughed between September and December last year.
Still, the recovery for now appears as lopsided as the boom that preceded it. VIP market volume remains depressed because of credit issues, while the cash-based mass market continues its slow but steady growth. For example, VIP wagering volumes at the Wynn Macau were down 27.7 per cent from a year ago and 2.7 per cent from the previous quarter at US$10.7 billion (see first chart). And that wasn't an accident.
'I think in the first quarter in '09 volume was down partly because of the economy, but the bigger part was by design because we do want to be more careful with credit,' Wynn International Marketing president and Wynn Macau chief operating officer Linda Chen said on an investors' conference call.