Macau’s casino stocks have recorded their biggest jump in more than six years following Friday’s announcement by the Macao SAR Government clarifying many details of planned amendments to the city’s gaming law.
As reported by Inside Asian Gaming, the announcement was seen as overwhelmingly positive for casino concessionaires by allaying fears around new license terms, tax rates and increased government control over daily casino operations.
While further details are expected to be released later this month when the draft bill is published by the Legislative Assembly, JP Morgan analysts noted over the weekend that, “Some of investors’ biggest fears should now be alleviated. We were surprised the government’s stance on some contentious topics has become far less onerous, if not surprisingly accommodative, in this draft gaming law versus initial plans during the public consultation.”
Macau’s casino stocks responded accordingly, led by the three US-owned operators in Sands China, Wynn Macau and MGM China, although all six concessionaires had booked strong growth by market close on Monday as news of the gaming law amendments sunk in. According to a report by Bloomberg, Monday represented the single largest day of gains since 2015 when Macau was emerging from China’s anti-graft drive.
Sands China enjoyed the largest gains, with its share price rising by 23.7% from HK$16.98 early Friday to HK$18.32 by Friday afternoon and then to HK$21.00 by close on Monday.
MGM China saw its share price jump 19.0% from HK$4.41 prior to Friday’s announcement to HK$5.25 at close Monday, followed by Wynn Macau – up 18.0% to HK$6.22.
Galaxy Entertainment Group, SJM Holdings and Melco International Development – the Hong Kong-listed parent of Melco Resorts – enjoyed smaller gains with Galaxy up 11.2% to HK$45.00, SJM by 9.0% to HK$5.43 and Melco International by 8.2% to HK$9.72.
Friday’s announcement included the news that up to six casino licenses will be issued under Macau’s impending re-tendering process, each with a 10-year term, while the tax rate will remain unchanged at 35% plus levies. The government has abandoned an earlier plan to implant a representative within each concessionaire.
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