Reason for stocks down
The outbreak of COVID-19 in the Fujian province may be a major short-term news storey for Macao, but in the long run, the true source of concern for investors should be the potential regulations imposed by the government. For the period of September 15 to October 29, the Macau government will accept public feedback on the rules that casino concession holders should be required to follow in order to operate their businesses.
All six concessions are set to expire in June 2022, and the market appears to be anticipating that they will be renewed. However, according to wooricasino, it is possible that the rules for concessions will be different than they are now. The government is considering reducing the number of gaming concessions from six to two, increasing control, and perhaps limiting the amount of dividends given out by Macao’s gambling enterprises.
To be fair, there were no new regulations released today, and we have no idea what the final plan will look like. However, investors are plainly dissatisfied with what they are hearing today. Not only is there uncertainty around concessions, but we also don’t know what possible rules may be placed in place that might limit revenue in Macao or how future expansion would be impacted. We also don’t know what potential regulations might be put in place that could limit revenue in Macao.
It is imperative that gaming enterprises in Macao make the most of the upcoming months. They all require concessions to be granted at favorable conditions, especially in light of the current bear market caused by COVID-19, which means that any additional limitations might force these equities to tank.
Las Vegas Sands has a lot to lose because it sold all of its operations in the United States in order to place a bet on Asia, notably Macao. Melco Resorts got its start in Macao and continues to rely on the area for the majority of its income. Wynn Resorts owns and runs two casinos in Macao, and the company stands to lose a great deal if the city’s gaming industry suffers a downturn.
MGM is the lone outlier in this group since it still derives the vast bulk of its revenue from gambling activities in the United States and because it only controls a little more than half of its Macao businesses. As a result, among these four equities, MGM Resorts International has the lowest operational risk due to its location in Macao.
Keep an eye on the news coming out of Macao for clues as to how the restrictions will be implemented? We’ve seen crackdowns on enterprises in China by 우리카지노, and if this trend continues in Macao, it might result in a drop in the value of the gaming stocks in the region.
As the pandemic’s influence on tourism diminishes, so does the sector. A growing number of casinos are placing bets on sporting events in an effort to broaden their sources of revenue. There have been a number of states that have made it lawful for businesses to create brick-and-mortar sportsbooks as well as online and mobile sports betting applications since the Supreme Court allowed sports wagering outside of Nevada in 2018.