Why Macao Casinos Are Tumbling for a Second Straight Day
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Melco Resorts & Entertainment is down 16%, while MGM Resort International is up 3%. Melco has greater exposure to Macao than MGM.
The government is considering revising Macao's gambling laws. Macau is the only place in China where it is legal to gamble. The licenses the casinos hold to operate in the city begin expiring next year. Western operators including MGM, Las Vegas Sands and Wynn Resorts are expected to have their licenses renewed.
Beijing has taken a hardline stance against Chinese companies that enjoy significant profitability through capitalism. MGM derives most of its revenue and profits from the U.S., while Sands sold all of U.,S. casinos to go all-in on Asia.
