Macau’s casino stocks crashed as China considers regulatory repression

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On Tuesday, Macau announced a 45-day public consultation that observers fear would lead to tighter regulation on the lucrative gaming industry in an extension of the recent crackdown on private companies by Chinese authorities.

Shares of U.S. casino companies operating in Macau (the only place where gambling is legal in China) crashed in response to the news. Sands China (SCHYF) fell above 32% in Hong Kong, while Wynn Macau (WYNMF) fell more than 28% i MGM China (MCHVF) fell more than 26%.

The government of semi-autonomous Chinese territory was studying changes in nine areas, Macao’s economic and financial secretary Lei Wai Nong told reporters. These areas include the number of betting licenses issued and their duration, a stronger review mechanism to approve operators, and employee welfare.

Authorities also want to consider promoting “projects with elements that do not belong to the game,” according to an official statement.

“[The Macao] the government has decided to carry out a thorough review and improvement of the existing legal system on the basis of past regulatory experience, the current situation of the gaming industry and the economic development of Macau, ”the statement said.

Investors have already been frightened by Beijing’s continued crackdown on sectors ranging from technology to gaming, which has wiped out up to $ 3 trillion from the market value of the country’s largest companies.
Gaming is the lifeblood of Macau, which depends on millions of visitors from mainland China. But since last year, Covid-19 has threatened the business model at the heart of Macau’s economy.

– CNN’s Beijing office contributed to this article.

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