The latest monthly gross gaming revenue (GGR) numbers for Las Vegas and Macau, China are out on Monday, and the numbers continue to tell a story of two gaming hubs headed in completely opposite directions.
The Numbers: The Las Vegas Strip reported $735 million in GGR in June, flat month-over-month and up 20% from a year ago. Las Vegas Strip GGR was up 19% from pre-pandemic levels in June 2019.
In Macau, COVID-19 shutdowns continued to weigh heavily on Macau numbers in the month of July. Macau reported 400 million Macanese pataca (MOP), or about $49.4 million, in July GGR, down 84% month-over-month and 95% from a year ago. Macau's July GGR was down 98% from pre-pandemic levels in 2019.
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Why It's Important: Bank of America (NYSE:BAC) analyst Shaun Kelley said the latest Vegas numbers coupled with earnings beats from Boyd Gaming Corporation (NYSE: BYD) and Churchill Downs, Inc. (NASDAQ: CHDN) bode well for upcoming earnings reports from larger Las Vegas players, including MGM Resorts International (NYSE: MGM), Caesars Entertainment Inc (NASDAQ: CZR) and Wynn Resorts, Limited (NASDAQ: NASDAQ:WYNN).
"Not quite enough evidence to call a meaningful consumer slowdown, but we see positive reads for the Las Vegas Strip reports (MGM, CZR and WYNN) given Locals/Downtown LV performance, and reasons to keep a close eye on potential softness for lower end regional properties (notable for PENN, CZR) next week," Kelley said.
Related Link: Macau Lockdown Slashes Targets For Las Vegas Sands, MGM, Wynn — Try These 3 US Casino Stocks Instead
Meanwhile, Macau has entered a "stabilization period" starting on Monday, during which casino guests will need to show proof of a 72-hour NAT test when entering premises where masks cannot be worn. If no COVID-19 cases are detected during the stabilization period, Macau will return to normal operating conditions that were in effect prior to Macau's June COVID outbreak.
Benzinga's Take: Casino stock investors have been hearing the same theme all year long: Vegas is booming and Macau is struggling. For investors that want to target Vegas this earnings season, Caesars is the only one of the three Vegas casino operators Kelley mentioned that has no exposure to Macau whatsoever.
Latest Ratings for CZR
| Feb 2022 | Loop Capital | Maintains | Buy | |
| Feb 2022 | Morgan Stanley (NYSE:MS) | Maintains | Overweight | |
| Feb 2022 | B. Riley Securities | Maintains | Buy |
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