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Macau's drop-off hurting Las Vegas

6 October 2008

LAS VEGAS, Nevada -- For the second straight day, bad news from Macau has reverberated on Wall Street.

Macau's news service reported Friday that casino revenues in September were roughly $900 million, a decrease of 3 percent from the same month a year ago. Macau gaming revenues grew 55 percent in September 2007, boosted by the opening of the $2.4 billion Venetian Macau.

The September 2008 figure marked the first time since July 2005 that Macau has reported a decline in gaming win.

Macau casinos are still ahead of the record-breaking $10.3 billion they won from gamblers in all of 2007. Through September, Macau gaming revenues are 45 percent above 2007 totals.

Gaming analysts attributed the September drop to the Chinese government-imposed visa restrictions, which have reduced the number of times a visitor from one of the mainland provinces can visit Macau.

JPMorgan gaming analyst Joe Greff said the Macau news agency is predicting that gaming revenues in October could also decline due to another round of government-imposed visa restrictions.

In September, mainland tourists were allowed just one Macau visit every two months. Effective Wednesday, the restriction was extended to one visit every three months.

"We continue to believe investors are best-served on the sidelines in the near term," Greff said.

The news was not welcome at the American stock markets, where shares of the major casino companies have been battered for much of 2008. News of the new visa restrictions affected Macau casino operator stocks on Thursday. Friday's information added to the misery.

Las Vegas Sands Corp., which operates the Sands Macau and Venetian Macau, hit an all-time low for the second straight day, closing at $23.11 on the New York Stock Exchange, down $3.40, or 12.83 percent.

MGM Mirage, which operates the MGM Grand Macau, fell to a 52-week-low of $21, down $2.56, or 10.87 percent. Wynn Resorts Ltd., which operates the Wynn Macau, closed at $70.42 on the Nasdaq National Market, down $3.42, or 4.63 percent.

UBS gaming analyst Robin Farley thought casinos operated by Las Vegas Sands and Wynn had picked up some Macau market share during September, while MGM Mirage lost some ground.

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