Las Vegas Pandemic Recovery Continues To Outpace Macau's, Casino Analyst Says

Las Vegas, Nevada, and Macau, China, are two of the largest global casino gambling hubs. Both gaming destinations took big hits during the COVID-19 pandemic, but the latest gross gaming revenue numbers suggest the Vegas recovery continues to outshine struggling Macau.

The Numbers: Many Americans think of Vegas as the top gambling destination, but Macau’s gross gaming revenue dwarfs Las Vegas. Unfortunately for Macau investors, its gross gaming revenue is still roughly 65% below 2019 levels, according to Bank of America analyst Shaun Kelley. Meanwhile, Las Vegas GGR is up 46% from pre-pandemic 2019 levels, suggesting the worst of the pandemic is now in the rear-view mirror.

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On Tuesday, Kelley said he models fourth-quarter Las Vegas GGR growth of 30% for MGM Resorts International (NYSE: MGM) and 15% for Caesars Entertainment Inc (NASDAQ: CZR) compared to the fourth quarter of 2019. Meanwhile, Kelley is also modeling fourth-quarter Macau GGR to be down roughly 73% from 2019 levels for Las Vegas Sands Corp. (NYSE: LVS) and down 75% for Wynn Resorts, Limited (NASDAQ: WYNN).

Macau Headwinds: In addition to sluggish gaming revenues, Macau is also suffering from negative investor sentiment after 10 casino junket officials were recently arrested.

“We also tweak our models to reflect the closing of VIP junket rooms in 2022 which WYNN indicated it is exiting immediately and LVS/other operators are likely to dial back substantially,” Kelley said.

Benzinga’s Take: While Macau struggles, gaming investors can play it safe by betting on casino stocks with little or no exposure to China and high-growth U.S. online sports betting and iGaming stocks. Based on Bank of America’s latest numbers, Draftkings Inc (NASDAQ: DKNG), MGM and Flutter Entmt ADR (OTC: PDYPD) subsidiary FanDuel are the three clear national market share leaders in both OSB handle and iGaming GGR.

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