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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.

Macau casino stocks soar after new licences granted

November 29, 2022 Macau Earnings & FilingsIndustry Updates

Operators struggle to recover as Beijing’s strict pandemic rules curb tourism

Macau gaming stocks shot up on Monday after the Chinese gambling hub’s government said it planned to award new licences to the city’s existing casinos, marking a reprieve for the industry as it struggles to overcome Beijing’s pandemic curbs.

Among the Hong Kong-listed arms of US casino groups, Wynn Macau rose 15.1 per cent, MGM China Holdings 13 per cent and Sands China 8.4 per cent by late afternoon on Monday.

The announcement offers relief to investors concerned about China’s increasing hostility towards gambling following the arrests late last year of two of Macau’s biggest gambling promoters, Alvin Chau and Levo Chan.

The two, who remain in jail on charges of illegal gambling, represented the city’s biggest “junkets”, which attracted high rollers to casinos. Their arrests were part of a broader crackdown on the sector by Beijing.

“Many investors — especially long-only — were largely staying away from the sector given this ‘tail risk’,” said DS Kim, an analyst covering the sector for JPMorgan. “But this is great news: one of the biggest overhangs of recent years is now removed.”

But with Macau still subject to China’s tight pandemic restrictions, analysts said the pain was likely to persist for operators who have had to take on large amounts of debt to keep afloat as border controls stemmed the flow of incoming gamblers for the past three years.

“The resurgence of Covid cases in China is again delaying a market recovery and is a credit negative,” Gloria Tsuen, a senior credit officer at Moody’s said.

Macau said on Saturday that the existing six casino concession holders would be allowed to operate for another 10 years from January on a provisional basis, with the final details still to be hammered out.

“The final award of the . . . new gaming concession contract remain subject to final discussions with the Macau Government,” MGM China said in a statement to the stock exchange on Monday.

Local operators Galaxy Entertainment, Melco Resorts & Entertainment and SJM Holdings, run by the family of late Macau gambling magnate Stanley Ho, were also among the licence holders whose terms the government extended.

The application of a Macau-registered entity linked to Malaysian tycoon Lim Kok Thay’s conglomerate, Genting Malaysia, was unsuccessful.

Visitors to Macau are still subject to quarantine and outbreaks can lead to lockdowns. One of MGM China’s properties in the city was locked down in October.

Source: https://www.ft.com/content/25931f5a-18e0-4447-ad2e-518d9960bfb3
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