Las Vegas casino mogul Sheldon Adelson was in a buoyant mood on a visit to his new project in Macau three months ago. The 5,800-room Sands Cotai Central, scheduled for completion next year, had already cost $4.4billion by then – “but who’s counting?” he said.
Mr. Adelson, one of the biggest donors to Mitt Romney’s US presidential campaign, is brimming with confidence about the future of gaming in Macau, as is his cross-town rival Steve Wynn, who has just broken ground on a new $4billion casino in the former Portuguese colony.
Yet both are raising their stakes in Macau just as the market is losing steam.
Total gaming revenue rose 12 per cent in June from a year ago, following paltry 7 per cent growth in May. That is a far cry from the blistering pace of expansion that fuelled a seven-fold increase in gross gaming revenue between 2004, the year the first foreign-owned casino opened in the city, and 2011, when casinos made $34billion in revenue.
Macau gaming stocks have slumped as that slowdown has become evident, with Sands China down around 30 per cent since April – falling 11 per cent in the past month alone – and MGM China down 02 since May. Wynn Macau and Melco International are both trading at record low price-to-earnings ratios.
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