The Money Lost at Macau Table Games Will Shock You

Macau is by far the biggest gambling market in the world, generating $31 billion in gambling revenue over the past year, compared to just $6.5 billion on the Las Vegas Strip. And Macau's casinos aren't filled with slot machines as Las Vegas' are. The region got 87% of its gambling revenue from baccarat in 2016. Sixty-one percent of that baccarat play was in VIP rooms reserved for high rollers.

The sheer volume of gambling and the government's limits on casinos and table games, which currently stands at 6,413, means the average table game generates $4.8 million in revenue each year. And some casinos make far more than that from each table.

Macau's incredible money machines

Each quarter, Wynn Resorts (NASDAQ: WYNN), Las Vegas Sands (NYSE: LVS), and Melco Resorts (NASDAQ: MLCO) disclose to investors how much revenue they generate on average from table games in their resorts. The following table shows the most recent quarterly numbers and the implied annual revenue each company is making from its tables.

You can see that Las Vegas Sands has a lower than average gambling win per table, but it made up for that deficiency by having 1,646 tables in play last quarter. Wynn Resorts, on the other hand, has an above-average table game win, particularly in the VIP market. The second quarter was a bit of an anomaly at Wynn Macau, with better than average luck, but it's normal for the company's win per table to be around $10 million annually.

The sheer amount of money lost -- or won, from the casino's perspective -- is staggering, and it's what drives the incredibly profitable operations these companies have.

What this means for investors

Understanding what drives a company's operations is important for investors. And in Macau it's baccarat play that drives revenue and earnings for the industry. Some companies clearly do more with the tables they're allocated than others do.

10 stocks we like better than Wynn ResortsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Wynn Resorts wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.