The six-strong club of Hong Kong-listed casino operators in Macau reportedly saw the aggregated value of their shares drop by almost $3.5 billion over the weekend as investors exercised caution regarding the future of the once booming sector.
According to a report from Inside Asian Gaming, the dip in the casino operators’ share prices began on Friday afternoon with their combined market cap now standing some 6.3% lower at approximately $51.6 billion. Although the reasons for this sudden depreciation remain unclear, the source speculated that it may be down to unease over some of the provisions contained within Macau’s under-consideration draft gaming bill.
Ponderous provisions:
Inside Asian Gaming reported that this piece of legislation had a successful first reading before the 33-member Legislative Assembly in January and, as currently written, could oblige the six licensees to bring more non-gaming elements to their facilities and follow an even stricter set of anti-corruption and national security rules. Officially known as the Amendment to Law Number 16/2001, the new raft of casino rules, which are to regulate the local sector for the next decade, is currently being subjected to behind-closed-door deliberations and may moreover compel every one of the operators to re-apply for their lucrative casino concessions.
Largest losers:
Melco International Development Limited, which holds a majority stake in casino giant Melco Resorts and Entertainment Limited, has reportedly been the most impacted by the recent slump with the individual value of its shares now standing some 7.9% lower at about $0.89. This was nearly surpassed by SJM Holdings Limited as it experienced a 7.4% decrease over the weekend to take the price of each one of its interests down to just $0.48.
Competitor collapses:
Inside Asian Gaming reported that the weekend saw a similarly disconcerting 7.2% drop in the value of individual shares in the Sands China Limited enterprise of American casino giant Las Vegas Sands Corporation to $2.36 while MGM Resorts International’s local MGM China Holdings Limited arm experienced a 6.4% plunge to $0.58. Finally, compatriot Galaxy Entertainment Group Limited purportedly chalked up an equally unsettling 5.5% crash to $5.10 while the Wynn Macau Limited subsidiary of Wynn Resorts Limited experienced a 5% recession to $0.79.
License lengthening:
However, the source reported that these drops were all the more surprising as they began only a few days after Macau unveiled a plan that is to see it automatically extend the operators’ local casino licenses by a further six months to the end of December. The government for the former Portuguese enclave purportedly decided to take this unilateral step owing to concerns that the draft gaming bill may not be finalized by the time the firms’ existing concessions expire on June 26.