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Macau Casino Industry Success Drives Up US Gaming Stock Prices

It has been a rocky few years for US gaming companies. In an industry that was once thought to be immune from the economic hardships of the country, US gaming companies found out in 2008 that they were not immune. Instead, many companies experienced sharp declines in their stock prices, and some did not survive the economic recession.

The ones that did survive, however, now appear headed towards a strong base of followers on the market. Las Vegas Sands, MGM Resorts, and Wynn Resorts are three companies that put their faith in Asian gamblers, setting up casinos in what has become the largest gaming destination in the world, Macau.

The Macau market is booming, and has been now for over a year. While Las Vegas and Atlantic City have seen double-digit revenue decreased month after month since the recession, Macau casinos have experienced some of the largest increases ever seen within the gaming industry. Over the past year, Macau casinos have been increasing their revenue by over fifty percent each month in year over year figures.

That consistency, and the length of time for the consistency, has analysts reassessing their projections for the gaming companies. The new analysis has led to investors becoming more comfortable with their money, and the result is stock prices that are on the rise. Wynn stock has jumped over six percent after the recent report that Macau casinos do not appear headed for any type of slow down.

Las Vegas Sands and MGM are experiencing similar stock increases, with Sands rising 5.5%, and MGM up 4.5%. The three companies were the most aggressive when it came to expanding into Macau. LVS CEO Sheldon Adelson was the first to buy in to Macau as a worldwide gaming destination, investing billions of dollars of his own money in the Macau industry.

Adelson's gamble paid off in the months after the recession when stock prices in the US were free-falling. Now, with the market stabilized, the Vegas-based gaming companies are relying on the strength of their Macau properties to instill confidence in US investors. Nevada casinos have seen an improvement in their numbers over the past year, with revenue again starting to head in the right direction.

The Macau government and existing casino owners became so concerned about the amount of growth within the gaming industry that they agreed last year to stop any future expansion of the industry, outside of the projects already in the works. The government wants to diversify their revenue stream so as not to rely solely on the gaming industry.

The Macau market appeared headed for a drying up last year when the Chinese government placed visa restrictions on mainland China residents. Those restrictions were quickly reversed, and it led to millions of Chinese gamblers traveling the short distance to Macau casinos on a daily basis.

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