Casino stocks plunge amid Macau licensing news concerns

Shares of Las Vegas-based gaming companies with operations in Macau plunged on Tuesday as markets reacted to news of new government-imposed travel restrictions and future casino permits.

Shares of Wynn Resorts Inc Wynn fell $11.23, or 10.9%, to $92.25 per share with a volume of more than eight times its daily average. Wynn operates two resorts in the Macau Peninsula and one off the coast of the Kotai Strip.

Shares of Las Vegas Sands Inc. fell $4.18, or 9.8%, to $38.71 per share, more than six times the daily average. The company has one property on the peninsula and five properties in Kotai.

MGM Resorts International, which has a dominant interest in its partnership in Macau, saw its stock fall $1.69 and 3.9%, trading slightly above its daily average of $41.41 per share. The company and its partner, Fancy Ho, each operate one resort in Bando and Kotai.

None of the three companies commented on the stock price decline. 경마

Brendan Boothman, director of government affairs at Las Vegas-based Global Market Advisors, believes Tuesday’s announcement of Macau’s future casino licensing policy is the main reason for the decline.

“One of the biggest puzzles in the gaming industry is starting to come into focus with the announcement of a public consultation period for the next phase in Macau,” Boothman said. “There are still a lot of questions about how this plays out, especially with the licensing period and the removal of subcontracts.”

In 2002, when the Macau government abolished the casino monopoly, three concessions were given to rival casino operators. They went to SJM Resorts Ltd., a subsidiary of Stanley Ho’s SJM Holdings Ltd., casino mogul Wynn Resorts Macao SA, a subsidiary of Las Vegas-based Wynn Resorts, and Galaxy Casino SA, a subsidiary of Galaxy Entertainment Group Ltd.

Local authorities eventually allowed each concessionary to establish a vassal state. They headed to MGM China Holdings Ltd., an affiliate of Las Vegas-based MGM Resorts, Sands China Ltd., a subsidiary of Las Vegas Sands, and Hong Kong-based Melco Resorts and Entertainment Ltd.

The current concessions are set to expire in June, but they can be extended. Under existing law, they can be extended by five years.

“With the Macau license set to expire in 2022 and the Macau Game Inspection and Coordination Bureau opening a public consultation period, there is uncertainty about the next step that is not fully accounted for in the published document,” Boothman said. “The speculation is not as surprising about future licenses as speculation, but there will be demons in the details.”

The 45-day public consultation, a series of public hearings on new gaming laws including issues such as the number and duration of casino licenses, will begin on Wednesday and run through Oct. 29.

Boothman expects the three Las Vegas companies in Macau to remain open.

“Sands, Wynn and MGM Resorts have done an outstanding job of exceeding commitments over the last 20 years,” he said, “and there is no reason not to be part of the next chapter in Macau.”

Macau’s government has also imposed restrictions on travel to the novel coronavirus disease (COVID-19), which is expected to slow the spread of COVID-19 but hurt visits to local casinos.

China’s health authorities said the number of new coronavirus infections had more than doubled in the southeastern province of Fujian, Bloomberg reported on Tuesday.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *