Macau casino operators saw billions of rupees depreciate on Wednesday as officials from the world’s largest gambling city unveiled crackdown plans that would tighten their grip on the already troubled industry.
Hong Kong-based operators Sands China and Wen Macau both sank about 30 percent. SJM Holdings and MGM China lost 25 percent, while both Melco and Galaxy Entertainment lost 20 percent.
Bloomberg News estimates that the combined losses of the six major operators are about 14 14 billion.
The sale came as the Macau government announced a 45-day public consultation that included direct oversight of the gambling industry, which has come under increasing scrutiny from authorities in recent years.
Officials want to include government representatives on the boards of licensed operators to oversee their operations and criminalize underground banking in the industry.
The move comes as the government in mainland China cracks down on a wide range of industries – including tech and private education firms – as it looks to strengthen its grip on the world’s second-largest economy.
President Xi Jinping is also in the midst of a campaign to target the country’s upper echelons and call for “common prosperity.”
“Gambling is a continuation of a huge crackdown,” said Jason Order of Spring Oval Asset Management, a New York-based investment manager.
Ader, who is also a former member of the Las Vegas Sands, said: “There is still debate about whether China is still worth investing in. Don’t like to watch
The announcement comes as six licensing companies are allowing casinos to operate in Macau.
Macau’s casinos typically account for about 80 to 80 percent of government revenue and more than half of its gross domestic product, with more than 82,000 people working in the industry by the end of last year. Are about one-fifth.
The city is expected to do more work in one month than in Las Vegas.
However, the sector has been affected by the corona virus, with tourism – the life of casinos – lifted by government travel bans to prevent the spread of the disease.
Gaming revenue for August was 82% lower than in the same period in 2019.
The industry has been struggling for years with China’s anti-corruption campaign.
The city was used as a freebie for wealthy officials and businessmen, both to gamble large sums of cash in both places and to disregard China’s strict rules on how many renminbi Can be taken
Under XI, authorities cracked down on VVIP junctions and kept a close eye on who was spending what and where.
Much of this market turned into very little regulated casinos in the Philippines and Cambodia.
Recognizing gambling income as its financial lifeline, the Macau government is concerned about the local economy’s over-reliance on industry and rising costs of living and doing business.
In recent years, it has sought to diversify its economy, presenting itself as a family-friendly tourist and destination – a strategy that was making a profit until the arrival of the corona virus.
Still, analysts say operators may not find the proposed measures more difficult.
Bernstein analysts, led by Vitaly Aminsky, say big-name firms are more likely to have their own licenses.
“We think the six operators who are here today will be here tomorrow,” Amansky said.
He added that he did not see “any major concerns” over the proposed direct monitoring as the firms were already working with officials.
– Bloomberg News contributed to this story –
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