Wilfred Wong, the president of Sands China, believes that the gaming environment in Macau will improve towards the end of 2019.
In September, Las Vegas Sands Corp. announced its quarter revenue from properties in China. The result after taxation was $2.11 billion, which is slightly below the Wall Street forecast of $1.23 billion. Rival Wynn Resorts (NASDAQ: WYNN) also reported a decline in the VIP market in Macau. Despite the fall, Wong believes that Sands focuses on mass premium segments that will bring the needed stability.
LVS reported that Macau gaming revenue in the third quarter, including slots and tables increased by 7 percent on a year over year basis, and the profit margin increased by 35.7 percent. That was the best ratio for an operator in Macau.
Wynn Macau COO Linda Chen had the same view as Wong on gaming. Earlier this week, she expressed hopes that Macau’s revenue will increase by the end of the year. China’s economic slowdown, the trade war between the US and China, and geopolitical demonstrations in Hong Kong are cited as the major factors contributing to the decline in gaming revenue.
Most gaming operators in Macau rely on the high-end segment, Sand China doesn’t. According to Casino.org, it’s estimated that for every $1 Sands makes in Macau, 90 cents comes from non-gaming activities. Analyst estimated that in October, the VIP gross gaming revenue dropped by 20 percent.
While Macau has experienced a tight market this year, LVS remains committed to the world’s largest gaming center. The company continues to expand in non-gaming ventures, which include a plan for a $2.2 billion non-gaming investment.
“We remain steadfast and believe that Macau is the best market in the world with respect to the continued deployment of our capital,” said LVS Chairman and CEO Sheldon Adelson.
Sands, together with other operators, are looking for a way to diversify the local economy by investing in non-gaming ventures ahead of the 2022 Macau licenses renewal period.