Macau investors unnerved by gambling expansion review

Oct 13, 2009 2:00 AM
Industry Insider by Ray Poirier |

In a stunning reversal of recent actions, Macau’s government leadership on Monday met with the operators of the region’s six casino companies and warned that they were concerned about unlimited expansion of gambling.

When the meeting was reported first by the Wall Street Journal, shares in Wynn Resorts Ltd. (WYNN), Las Vegas Sands Corp. (LVS), MGM MIRAGE Inc. (MGM) and Melco Crown Entertainment Ltd. (MPEL) fell from positive positions to negative.

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At closing, WYNN was down $1.94 to $65.88; LVS fell $0.33 to $17.72, MGM closed at $12.08, down $0.19 and MPEL was listed at $6.91, just $0.27 lower.

In recent weeks, shares in the major companies had benefited from recent announcements from Beijing, China, that it had decided to ease restrictions on travel, thus making it possible for more people from mainland China to patronize the casinos.

According to reports, the casino operators agreed that although it would appear to hamper their futures, they felt that caps on gaming expansion would prevent additional competition from entering the market.

Probably spurring Macau government’s move was the recent announcement that gambling revenues had more than doubled in September.

Also being considered by Macau is an increase in the permissible gambling age from the current 18 to 21 years of age.

Question? Comment? E-mail me at: Ray Poirier