Las Vegas Sands, MGM, Wynn Stocks Decline. Why Shares of Casino Operators Are Falling.

Wynn Resorts, Las Vegas Sands, and MGM Resorts International all have a presence in Macau, one of the world’s biggest gambling hubs. (Anthony Wallace/AFP/Getty Images)

Shares of Las Vegas Sands and other casino operators slid on Friday as investors feared softer-than-expected travel data could have a bearing on business in Macau.

China’s ministry of tourism earlier this week released passenger data for the first two days of Golden Week, a national holiday meant to encourage domestic travel and stimulate the economy.

Total volume increased 1.8% from the prior year, with railway and waterway travel seeing the most growth, increasing 6.9% and 17.3%, respectively. However, these number were “a bit weak,” Citi Research wrote on Thursday.

“Overall passenger throughput volume during first two days could be below some investors’ expectations, which we partially attribute to more people starting their travel earlier this year,” analysts posited.

Macau, a special administrative region of China, is one of the world’s largest gambling hubs. Major casino operators have steadily expanded their footprint in Macau, led by Las Vegas Sands, which operates the largest hotel in the region, the Venetian Macau.

Shares of casino and resort companies with a presence in the area were slipping on Friday. Las Vegas Sands declined 5.5% to $52.05. Wynn Resorts and MGM Resorts International, which have comparably smaller operations in the region, were down 6% and 1.8%, respectively.

The losses Friday put Wynn on pace for its largest same-day percentage decrease since April, according to Dow Jones Market Data. At the time of writing, the stock was the worst performer in the S&P 500 index.

All three stocks got a boost in July when Macau’s Gaming Inspection and Coordination Bureau reported that gross gaming revenue had surged 19% in June from the same period a year ago.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com