Investors – A second bank said Macau faces a short-term slump in gambling revenue that could affect earnings for Las Vegas Sands (NYSE:LVS) and other top casinos in the hot gambling destination on China’s southern coast.
Nomura Securities on Thursday cut its earlier-raised 2014 revenue growth forecast for Macau from 17% to 14%. The Japanese bank joined Wells Fargo, which, as reported earlier, has been warning for some time that Macau casinos face headwinds in the short term.
Sands separately said Thursday that President and Chief Operating Officer Michael Leven will retire at the end of this year. And CEO Sheldon Adelson tried to quash rumors that he plans to step down.
“I am as bullish about this company as I’ve ever been, and I have no plans of slowing down or passing the CEO title or job to anyone,” Adelson said in a statement.
Meanwhile, Nomura analyst Harry Curtis in a report noted the bank raised its estimate for Macau in March, based on stronger-than-expected demand early in the year. “Since then, growth has contracted to 12%-13%, which we expect to continue through year-end,” Curtis said, “so our revised forecast for the full year is back to our original +14% estimate.”
Both banks blame a credit crunch in the world’s top gambling destination for the projected slowdown.
VIP gamblers rely on local loans to play in Macau because Chinese officials restrict the amount of cash visitors can bring in. But Chinese officials have accused some lenders of laundering money for illegal activities and imposed further restrictions that could keep some VIPs away.