Casino companies are feeling the heat of the tough economic scenario, according to StockCall.com, a financial website that provides research and opinions on stocks. “Most of the gambling companies have expanded their operations to Asian hotspots like Macau and Singapore,” StockCall.com said on Friday. “However, since the current economic scenario is gloomy across the globe, it is difficult for the gambling companies to come up with ambitious plans for the near future.” In the U.S., Nevada saw its gaming revenues decline by just over 11 percent in November.
Wynn Resorts is going through some tough times as it is experiencing a decline in its high roller revenues. Its outlook for 2013 is still cautious, StockCall.com said. Since the gambling company is more reliant on its high margin top player segment, it is likely to report only modest growth this year. Due to tough economic times in the U.S. as well as in China, the luxury gambling segment will remain in the doldrums for the foreseeable future, putting extra pressure on Wynn's bottom-line.
Wynn derives more than two thirds of its revenue from Macau and the decrease in luxury gambling revenue in Asia is expecting to put a dampener on the company's fortunes. Another indicator that the company is going to take conservative approach this year comes from the expected delay in the commissioning of its new resort in Macau. Wynn was expected to open its Cotai resort in 2016. However, now the expected date has been pushed up to 2017. While Wynn Resorts caters to the upper segment of gamblers and has maintained distance from mass gambling, it is still likely to feel intense pressure from the growing presence of discount casino runners like Las Vegas Sands.
Melco Crown primarily operates in Macau and the gambling haven reported 13.5 percent revenue growth for 2012. However, a bigger chunk of this growth came from mass gambling segment and Melco Crown reaped the benefits.
Melco, with its $11.20 billion worth of market capitalization, is one of the biggest players in the leisure industry. However, unlike Wynn and MGM, Melco is almost completely focused on the Asian gaming scene and thus is more open to macroeconomic factors in China and Asia. The gaming company is also planning to go ahead with its expansion plans as it inked a new $1.4 billion worth of financing deal to back its Macau Studio City venture. Melco is also well placed to grab a big slice of the pie as the economic situation in China eases up.
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