Casino shares waxing with Lunar New Year gambles

MACAU casino shares jumped after China’s Lunar New Year holidays as tourism growth doubled to the world’s biggest gaming hub.

Visitors from the China mainland to Macau reached almost 900 000 during the week-long Chinese New Year holiday, climbing 26 percent from last year’s festive holiday, according to Macau’s tourism office. That accelerated from last year’s 12 percent growth and triggered a rally for the Hong Kong-listed casino operators.

Galaxy Entertainment Group rose as much as 3.1 percent and led the jump in the sector. Sands China had climbed 2.6 percent while SJM Holdings had advanced 1.9 percent. Wynn Macau and MGM China Holdings also posted intra-day gains yesterday.

The tourism numbers over the lunar holiday are a bright spot amid concerns that high rollers are staying away from the gaming tables in the territory as China’s economic slowdown and trade tensions pressure consumer spending. Monthly casino revenue in Macau fell last month for the first time in more than two years. Tourism from China has seen a boost since October after the opening of a bridge linking Zhuahai on the mainland to Macau and Hong Kong.

But actual casino revenue data may not look as rosy as the visitation numbers. “The Chinese New Year holiday season was decent this year, but definitely not as strong as the visitation number shows,” Grant Govertsen, a Union Gaming Securities Asia Ltd analyst said yesterday.

Based on spot checks, Govertsen said many mainland visitors are day trippers who don’t visit the territory’s casinos or spend money in the city.

A Morgan Stanley survey last month showed lower hotel booking rates overall for Chinese New Year, especially at luxury resorts, and high rollers who can skew casino revenue were in short supply at the tables.

Suncity, the largest operator that extends credit to gamblers, saw betting volumes drop 3 percent during the first five days of the Year of Pig, said the group’s executive director Andrew Lo. | Bloomberg