Casinos with Macau properties decline

Oct 15, 2009 8:03 PM
Staff & Wire Reports |

Shares of casino operators with properties in Macau fell Thursday as speculation grew that the government was tightening visa restrictions.

The current policy allows residents from the Guangdong province to visit Macau once a month. The province is the largest source of Mainland Chinese visitors to the enclave.

However, new reports suggested that the government had backpeddled and was implementing an updated rule that would only allow Guangdong residents to visit Macau every other month.

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Macau is the only place in China where gambling is legal, and stricter visa restrictions limiting how often a bulk of its visitors can come could crimp gaming revenue.

But Robert LaFleur of Susquehanna Financial Group says what really happened is that the Guangdong government has changed the way visas are approved, so sometimes it could take one month while other times it may take two months.

Still, LaFleur believes Macau's gaming revenue surge of more than 50 percent last month rattled authorities.

"The government is likely looking for growth, but not the explosive growth we saw in September," he explained.

China wants to rein in gaming revenue growth in part to curtail potential gambling problems and to ensure the casino operators are not profiting too much from its residents.

Even if visas do take longer to be approved, JPMorgan's Joseph Greff does not believe it will put a stranglehold on future results - as he has received indications that October gaming revenue is up more than 40 percent so far.

Las Vegas Sands Corp. (LVS)'s stock fell $1.39, or 7.8 percent, to $16.55 in morning trading. Shares of MGM MIRAGE (MGM) shed 41 cents, or 3.4 percent, to $11.68, while Wynn Resorts Ltd. (WYNN) dropped $3.94, or 5.9 percent, to $63.19. Shares of Melco Crown Entertainment Ltd. (MPEL) declined 51 cents, or 7.8 percent, to $6.

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