Gambling review: $18 bn blown as Macau casino investors fold

Macau’s top gaming stocks lost a record $18.4 billion in combined market value on Wednesday after officials said they would change casino regulations to tighten restrictions on operators, including appointing government representatives to “supervise” companies in the world’s biggest gaming hub.

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Bloomberg Intelligence index of the six big casino operators fell a record 23 per cent. American operators saw the worst selloffs, with Sands China Ltd. sinking as much as 33 per cent, while Wynn Macau Ltd. plunged 34 per cent, both the steepest declines ever. Galaxy Entertainment Group slumped 20 per cent, its sharpest drop in a decade. Wynn Resorts Ltd., Las Vegas Sands Corp. and MGM Resorts International sank for a second day in US trading.

The sector also led declines in China’s dollar bond market. A note due 2028 from Wynn Macau sunk 9 cents on the dollar to 91.4 cents, according to Bloomberg-compiled prices, set for its biggest-ever decline. Dollar bonds from SJM Holdings Ltd., MGM China Holdings Ltd. and Melco Resorts and Entertainment dropped at least 3 cents.

Officials in the enclave, the only place in China where gambling is legal, said they would begin a 45-day public consultation period on Sept. 15 to discuss the legal revisions. Among the topics being covered: how many licenses — known locally as “concessions” — will be allowed, how long their terms will be, and the level of supervision by the government.

While license renewals have been expected for some time as the current ones expire next June, the move to tighten regulatory control took the industry by surprise. Besides appointing government representatives, the revisions also propose increasing local shareholdings of casino companies, without elaboration on how these moves will be enacted.

Gaming revenue for the month of August was 82% lower than the same period in 2019.