Las Vegas Sands, Wynn Resorts Surge As Macau Clarifies Casino Rules
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Macau, the world's largest gaming hub, will cap the number of casino operator licenses at six, while boosting local ownership requirements, when it auctions new permissions later this year.
Las Vegas Sands (LVS) - Get Las Vegas Sands Corp. Report and Wynn Resorts (WYNN) - Get Wynn Resorts, Limited Report shares surged higher Friday after officials in Macau set out plans to limit the number of casinos in the world's largest gaming hub.
Macau, a Special Administrative Region of the People's Republic of China, will cut the tenue of gaming licenses to 13 years -- from the current level of 20 years -- and cap the total amount offered at six. Local ownership requirements will also rise to 15% from 10%, officials indicated Friday, and some restrictions on the amount of casino shares that can trade publicly are also being considered.
The new recommendations, which need approval from the local legislature, removes a significant amount of uncertainty for U.S. gaming groups as they prepare to bid for new licenses when their current permissions expire in June.
Macau sparked concern last year when it began mulling changes to both the number and tenure of casino permits amid a broader industry crackdown, with Lei Wai Nong, Macau's secretary for economy and finance, indicating he could "maintain or even reduce the number of concessionaires" in this year's bidding process.
Macau's gaming market generates around $37 billion in annual revenues, around five times more than the collective take of the Las Vegas strip.
Las Vegas Sands shares were marked 5.4% higher in pre-market trading to indicate an opening bell price of $39.70 each, while Wynn Resorts gained 6.3% to $88.52 each.
