- Following new Chinese government restrictions, companies doing business in Macau suffer stock drops across the globe.
- Macau officials are consulting government officials regarding new restrictions and potential revisions to their gaming operations.
LAS VEGAS – The Asian gaming hub of Macau recently announced that they will be tightening restrictions on gambling and operators within the gaming industry. As a result of this, United States casino companies with establishments located in Macau have been watching their stocks fall tremendously in value as stakeholders pull out before a crash occurs.
The Damage That’s Been Done
The American Resort company of Las Vegas Sands saw their stock fall by upwards of 6% following the announcement this week, along with MGM Resorts International falling by nearly 4% and Wynn Resorts dropping over more than 10% in value.
“It’s another concerning action of increasing regulation aimed at some of the higher growth parts of the economy. It will probably make investors even more hesitant to expand investments in China,” said Greg Taylor, chief investment officer at Purpose Investments, in a recent Bloomberg report.
Macau’s biggest gaming stocks in Hong Kong lost over $18 billion in their combined gambling markets, following these new regulation announcements. These changes are not just affecting companies local to the new restrictions, but United States gaming companies as well, as can be seen by the recent stock downfalls.
Enclave officials are preparing to begin a 45-day public consultation period regarding discussions of legal revisions to the market.
“Foreign investors are growing frustrated with all the Chinese crackdowns and uncertainty as to how much further officials will go,” said Edward Moya, senior market analyst at Oanda Corp.
The new gaming regulations that have already been implemented seem to be doing some damage to any company involved with gambling in Macau, but perhaps some revisions can be made during the consultation to ease the temporary, current restrictions.