$16 Billion Knocked Off Stocks as Macau Government Review Gambling Laws
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A potential change on the horizon for casino gaming in Macau has led to $16.4 billion being knocked off the market value of gambling operators on the stock market. This comes on the back of a warning from analysts that regulations in place in this type of venue may squeeze something that is already tight, due to the Covid-19 pandemic.
There has been a change towards online gaming, something that has been happening for many years. Over the past year, this change has been accelerated further, with those who experienced online gaming not going back to their local casinos. Finding facts and info out about online casinos has never been easier, with assistance and pages such as this Casino Days information page there to help those who want to move online.
Just some examples of what has happened on the stock market include a 29% drop for Sands China, 28% drop for Wynn Macau, and a 22% drop for MGM China. Numerous other companies who have strong ties to operating in Macau felt drops of between 15 and 20%.
The correlation between the size of the drop and the dependence on Macau as a business model is there, showing that this is to do with current happenings in the Chinese territory, rather than anything related to the worldwide gambling industry.
The uncertainty of the future given what is happening in Macau is heightened on the back of closures and restrictions in place due to Covid-19, so it is the combination of both that has caused the drops we have seen.
What could Happen in Macau?
Revisions to the gambling law are on the horizon in Macau, and a public consultation has opened up for 45 days to gauge interest.
The changes are expected to give powers to scrutinize operators in the area a lot more than they have been in the past, a move that would certainly make the international news. Not only for financial reasons either, to see the amount of money this will cause the industry, but simply because it is a hugely popular part of the world that many people have visited or thought about visiting.
On top of this, we have already seen Chinese regulators look at other industries and make big changes. Rather than being something that might happen, the casino industry in Macau looks to be the next on the list of targets.
The basics of the changes will likely see the government have a far greater say on what happens in Macau, while also looking at community concerns regarding behaviour. There are even talks of government representatives being added to the board of those companies who are operating in Macau, to ensure they are running correctly.
The changes may also look at how Macau operates with VIP players, and how these are drawn in by big bonuses and promotions, seemingly something else that the Chinese government wants to regulate.
