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Asia Casino News │ ACN东方博彩新闻

Asia Casino News outlet for Online Gaming and Gambling Industry in Asia.

Investors urged to temper euphoria on Macau licenses

January 17, 2022 Earnings & Filings

Investors have been advised not to rush into gaming shares on the back of the news that Macau will keep the casino operators allowed to operate to six, until more details are revealed.

Macau’s government said on Friday that it planned to give a maximum of six licenses for terms extending to 13 years and limit the public float of gambling operators as part of much-anticipated legal changes aimed at tightening government oversight on the world’s largest gaming hub.

The licenses will carry a term of 10 years which can be stretched by another three years, according to a government briefing Friday. The

“The measures seem to be reasonable as maintaining six licenses, with 10 years, still encourages them to invest with good return,” said Steven Leung, sector analyst at Uob Kay Hian (Hong Kong) Ltd, Bloomberg reported. “I think the public float is a major concern from the government because gaming may involve capital outflows and money laundering. So a public float limit is needed.”

The government has no plan right now to adjust the level of taxes on casino companies, officials said at the briefing. Casino operators currently need to pay 40 percent of their gaming revenues as taxes. Current licenses will also stay in place until the new law is implemented, they said.

Their US-listed parents climbed between 4 percent and 13 percent on Friday, leading gains among S&P 500 and MGM China’s (2282) parent MGM Resorts said it welcomed and supported the decision.

However, Kenny Wen Kit, wealth management strategist at Everbright Securities, does not suggest investing in casino stocks until more progress in border reopening and junket operators are in sight probably in the second quarter or the second half.

Despite Macau’s latest news alleviating key concerns over casino operators, uncertainties of the border reopening and junket operators, two main drivers for the gaming revenue, are still clouding the gaming industry, Wen added.

To that end, he said that he holds a neutral view towards the casino shares with a limited uptick from his projection.

https://www.thestandard.com.hk/section-news/section/2/238036/Investors-urged-to-temper-euphoria-on-Macau-licenses

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