Macau Gambling Revenues Jump 17.6 Percent In August
Anything and everything with exposure to the gambling space caught a bid this week as Macau gambling data came in strong, despite a slowing Chinese economy. If you’re not familiar with the sector, Macau is the world’s largest gaming market, one of two special administrative regions of the People’s Republic of China. China remains responsible for the region’s defense and foreign affairs, while Macau maintains its own legal system, police force, monetary system, customs policy, and immigration policy. August’s revenue of 30.7 billion patacas ($3.88 billion) was the second strongest total this year, according to government data released on Monday. Gambling revenue in Macau rose 17.6 percent in August on a year over year basis. This exceptional growth has fueled by increasingly accessibility to the region, rising incomes, and mass table acceleration.
Shares of Las Vegas Sands (NYSE:LVS) are higher by more than 3 percent over the last two days as the company is in the best position to benefit from the strong year over year gains. With a number of key properties on the Macau strip, the company has positioned itself well to take advantage of traffic gains. Over the last few years Las Vegas Sands has actively taken market share from its competitive base, today, its market share is estimated at a whopping 20 percent of the total gambling revenues. However, investors should realize the sector is often very volatile and exposed to China’s headline risk.
Hence, the more conservative investor may look to diversify themselves throughout the sector. You might want to consider the Market Vectors Gaming ETF (NYSEMKT: BJK), which holds many familiar names including Las Vegas Sands, Wynn Resorts, and MGM. These three company’s represent the Macau gaming market, and for only a small management fee the average investor can avoid the costly commissions associated with purchasing these securities by themselves.
Going forward, a number of transportation and infrastructure projects should help sustain revenue growth. A new high speed rail project should increase mass table volumes from the Chinese masses. Moreover, the Hong Kong–Zhuhai–Macau Bridge, set to open in three years, will give Hong Kong airport travelers easy access to the district in only 20 minutes. The addition of this bridge will hopefully pull in a large number of VIP travelers, whom may have an hour or so to kill before leaving Hong Kong. Keep your eyes on Macau gambling data for the remainder of the year, the result are released towards the beginning of every month and offer an insight into the true strength of the Macau economy.
Become An Exclusive Member Of Wall Street Insanity