Casino Stocks Fall After Analyst Projects Weak October Business In Macau Due To Bad Weather

The timing of Typhoon Matmo is said to have deterred gamblers during China's National Holiday Week.

Stocks of major casino companies fell on Monday after analysts at Jefferies reported weak activity in Macau last week, which also raised concerns for the all-important Golden Week period.

Industry sources and checks indicated that Macau's gaming revenue for the seven days ending Oct. 12, which includes the end of the Golden Week holiday period, was up 3% year-over-year or down 46% week-over-week, according to Jefferies.

China’s National Day Golden Week, a weeklong public holiday beginning around Oct. 1, typically brings a sharp surge in visitors, hotel occupancy, and overall tourist activity.

In the month to date, the average amount of gaming revenue Macau casinos earned per day dropped 5% YoY to $804 million, according to Jefferies.

Shares of Wynn Resorts Ltd. and Las Vegas Sands Corp fell around 6.2%, while those of Hong Kong-based Melco Crown Entertainment Ltd. were down 4% after Jefferies published its projections.

On Stocktwits, the retail sentiment was 'neutral' for Wynn and Melco, and 'bearish' for Las Vegas Sands as of late Monday.

The development could further weigh on casino collections from Macau, one of the world's biggest gambling destinations, after business was disrupted last month due to a cyclone.

Macau's gross gaming revenue rose just 6% in September, according to official data, missing analysts' expectation of 9% rise. The casinos suffered a 33-hour shutdown in the month due to Super Typhoon Ragasa.

Business was disrupted further in early October as Typhoon Matmo brought another wave of closures and weaker-than-expected visitor traffic.

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