The Chinese government’s crackdown on corruption, increased high-roller scrutiny and a partial smoking ban have put a serious damper on the Asian gambling mecca of Macau. #-ad_banner-#Gaming revenue in the former Portuguese colony fell for the eighth consecutive month in January, down 17.4% year over year. February is expected to be much worse — the worst on record, in fact, with analysts anticipating a 35% to 42% decline over 2014 levels. U.S.-based casino operators are also seeing lower gaming revenue from Sin City. After four years of annual gains, gambling revenue on the Las Vegas Strip fell 2.1% in 2014,… Read More
The Chinese government’s crackdown on corruption, increased high-roller scrutiny and a partial smoking ban have put a serious damper on the Asian gambling mecca of Macau. #-ad_banner-#Gaming revenue in the former Portuguese colony fell for the eighth consecutive month in January, down 17.4% year over year. February is expected to be much worse — the worst on record, in fact, with analysts anticipating a 35% to 42% decline over 2014 levels. U.S.-based casino operators are also seeing lower gaming revenue from Sin City. After four years of annual gains, gambling revenue on the Las Vegas Strip fell 2.1% in 2014, according to the Gaming Control Board. While gaming stocks in general seem unattractive against this backdrop, one in particular already appears to be against the ropes with lofty valuations, high debt levels and poor technicals. This makes it a prime target for a sell-off after next week’s earnings report. MGM Resorts International (NYSE: MGM) currently trades at 40 times forward earnings, almost double its peer group average of 23. While companies that are growing earnings faster than their peers often deserve a higher P/E ratio, analysts are only forecasting EPS growth of 12.5% a year for MGM for the next… Read More