Sands China jumped most in over ten years, one of the biggest gainers. It jumped 22.3% to end the day at a 14.6% gain. Another gainer was the Wynn Macau, which climber 19.1% and closed the day at 11.9%. This was its biggest climb since March 2020.
The Macau government decided to retain six concessionaires. However, their operating period was halved. Therefore, they will operate for ten years. Industry analysts, investors, and casino executives were jittery about a possible change in the status quo in the number of operators in this Chinese territory.
The country is the largest gambling hub in the world in terms of the money wagered. In recent years, it has moved to tighten its scrutiny of casinos to clamp down illegal money flows from Mainland China. The government also seeks to stop underground lending and illicit cash transfers.
There was a proposal to have casinos supervised by a government official. However, the government backed down after stakeholders in the industry protested the move. The six operators whose licenses were renewed had a few months left on their existing licenses.
The Specifics of the Regulations
This regulatory announcement brought clarity among casino investors in the jurisdiction. There were also a few add-ons on the revised rules that casinos had to fulfill. First, government officials who are everlasting residents of Macau should have 15% ownership of the casinos. In addition, the casinos are required to increase the amount of capital to 5 billion patacas (equivalent to £465.26 million) from the current 200 million patacas. No restrictions have been placed on the casino games offered by the operators.
In September 2021, casino stocks went down. They lost billions of dollars in market value just before the 45-day public gaming consultations where the government sought public participation in setting rules and renewal of licenses. This consultation set its eyes on various areas, including the number of licenses and employee welfare. New rules are expected in the near future.
China has been wary of the territory’s over-reliance on gambling and has tried to restrict gambling. One of the proposals is license rebidding. However, the process for this has not been created. Most operators have been diversifying non-gaming activities and increasing their corporate social responsibility to appeal to authorities.