International edition
September 19, 2020

Tougher restrictions could curb gambling revenue

Sands, MGM and Wynn fall as China cracks down on Macau

(Macau).- Shares of Las Vegas Sands, MGM Resorts International and Wynn Resorts fell Tuesday as new Chinese leadership tightens controls on Macau, the only legal casino gambling area in the country. The Big Three US casino companies all have multibillion-dollar casinos there.

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.S.-owned casinos in Macau aren't accused of any wrongdoing, but shares fell on concerns that tougher restrictions could curb gambling revenue because gamblers' credit might be restricted. Some gamblers might also shy away from the region because of concerns about possible illegal activities by credit lenders.

Sands shares were down 3.2% at 45.26 in Tuesday afternoon trading. MGM fell 3.2% to 9.85 and Wynn skidded 4.3% to 108.49.

Chinese officials have called into question actions by so-called junket operators who extend credit to high rollers from around the world who flock to Macau, the globe's fastest-growing gambling destination with revenue more than five times that of Las Vegas.

The 18th Communist Party Congress last month elected Xi Jinping the new party leader. The newly elected government in recent weeks has reportedly detained at least three junket operators as it moves to curb possible illegal activities in the former Portuguese colony on China's southern coast.

On Monday, officials in Macau which, like Hong Kong operates under a separate set of rules from the rest of China, said gambling revenue in the region climbed 8% in November to us$ 3.12 billion. That met analyst forecasts, driving shares higher. On an annual basis, total revenue would be roughly us$ 37 billion.

The Wall Street Journal said credit operators have taken money out of Macau in anticipation of the crackdown by Chinese officials.
An analysis of Chinese data showed that an estimated us$ 225 billion out of the country as of September, including both legal and underground financial transactions.

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