Is Macau still investible?

March 31, 2022 Macau Emerging Markets Industry Updates

Macau has long been seen as a city paved with gold – home to the biggest casino market in the world with gaming revenues at one time seven times higher than Las Vegas. But while Vegas has roared back to life, Macau is stuck in a rut with concerns over when it will emerge from the COVID-19 pandemic and how changes to the gaming law might reshape its future. That has left investors feeling more than a little uneasy, as reflected in the current stock prices. So is Macau still investible? IAG takes a closer look.

Macau gaming stocks have endured a rollercoaster ride ever since the COVID-19 pandemic began wreaking havoc on the global leisure and tourism industry in early 2020.

Since the first week of trading that year, the Hong Kong listed entities of Macau’s six concessionaires have seen their share price fall by between 20% (Galaxy Entertainment Group) and 70% (Wynn Macau Ltd) as of late March 2022.

Yet it hasn’t all been about COVID. As reported by Inside Asian Gaming at the time, those same stocks lost 26% of their market capitalization – worth HK$143 billion (US$18.4 billion) – in a single 24-hour period on 15 September following publication by the Macau government of its gaming law public consultation discussion document, which contained a raft of suggested changes to the law which regulates casino gaming in Macau. More recently, on 7 March 2022, the combined market cap of the same six companies fell by 6.3% or HK$27.1 billion (US$3.47 billion) just days after the government extended the current licenses of the concessionaires by six months from 26 June until 31 December 2022, effectively delaying the re-tendering process for new gaming concessions.