Macau gaming revenues almost reached HK$7 billion though the middle of March. While slower sequential growth, up 50% for the full month would be a good result.
We think Macau total gaming revenues were just under HK$7 billion through March 15th. Revenues are on track for a HK$14 billion month which would be an increase of over 50% from March 2009. This is sequentially slower growth than February (+70%) and January (+63%). However, HK$14 billion is a very good number. Note the monthly trends below
Yesterday’s sharp sell-off was driven in part by fear of more regulation ahead of the Macau CEO’s address which ended a few hours ago. Nothing major was announced, however. Relief here combined with the strong month-to-date numbers is resulting in the bounce back in the stocks today.
Some may be concerned about Wynn's Cotai development given the Macau CEO's comments about slowing development. However, in the press conference after his speech, Chui was quoted as saying "Apart from those we have agreed in principle in the past, in construction and those already approved, we will regulate (approval of the building of new casinos) in the future." This appears to us to be a little less forceful, as it allows for projects that have been approved, as opposed to just development already started, and simply states that new approvals will be regulated, not that they will be prohibited.
The only somewhat disconcerting part of the speech was related to restrictions on foreign labor, which will apparently be tightened. We don't believe the Macauese government would jeopardize LVS's construction of Lots 5/6 but inadequate labor could delay the project further.