Sheldon Adelson, Chairman of casino giant Las Vegas Sands Corporation has said that mass market segment is driving a revival in Macau’s casino industry which has been battling a prolonged slump in revenues for over two years now.
His remarks came as the company reported its second quarter earnings for the year which although did not meet analysts’ expectations, registered a growth in mass market revenue for the first time since September 2014.
In a statement Adelson said,
“Stabilization appears to be here. We’re very happy that there’s one month that hit the bottom and we have no reason to believe that that’s not going to continue.”
The optimism is also in light of the fact that two full-scale integrated casinos in the Wynn Palace and Sands China’s Parisian Macao are scheduled to be opened over the next couple of months. Bloomberg Intelligence analyst Margaret Huang said that the bottom for the Macau market was difficult to judge since the VIP market was cyclical and volatile. She added that the recovery for the market would be visible only in third quarter after the comparison eased and the new casinos were opened.
Rob Goldstein, Sands China president said that gaming floors were busy particularly during weekends and added that Macau was turning into the mass market gambling capital of the world. Commenting on Parisian’s impact, Adelson said that the casino was the right offering for the current Macau market trends as well as for long-term trends in Chinese tourism.
Analysts from Brokerage firm Sanford C. Bernstein & Co. have said that Sands China was well placed to benefit from the shift in the market. Lead analyst Vitaly Umansky stated that the company’s facilities across retail, hotel and conference rooms were fueling the interest of recreational gamblers and tourists. He also noted that with 12,700 rooms, the Parisian could be a turningpoint for the company giving it a major competitive edge.
Adelson’s optimistic remarks sparked a rally in all casino stocks with shares of Las Vegas Sands climbing 4.1 percent while Sands China went up by 6 percent.
Second quarter results for Las Vegas Sands saw a drop in sales by 9.3 percent for the company to $2.65 billion. Analysts’ expectations were fixed at $2.75 billion. The company’s earnings before interest, taxes, depreciation and amortization (EBIDTA) fell by 14 percent to $487.7 million. The Sands China’s Venetian facility saw its property-level EBITDA fall by 4.2 percent year-on-year while Marina Bay Sands in Singapore witnessed a drop of 1.7 percent.