Macau Casino Stocks Languish on New Money Transfer Rules
Posted on: August 12, 2024, 11:56h.
Last updated on: August 12, 2024, 12:26h.
Macau casino stocks extended a now lengthy slump Monday on news that the Special Administrative Region (SAR) is attempting to criminalize unlicensed money transfers when the intent of the exchanged cash is for wagering purposes.
![Macau casino revenue mass market](https://www.casino.org/news/wp-content/uploads/2024/06/1x-1-858x571.jpg)
China, of which Macau is a territory, forbids visitors to the casino center from entering with more than $5,000 in cash, but that rule has long been circumvented with bettors using local money exchangers to whom cash was sent prior to the bettor’s arrival. China also limits the amount its citizens can withdraw from bank accounts via debits when traveling outside the country, furthering demand for Macau money transfer operations, but Beijing is clamping down on that system.
That comes as Macau casino stocks have been trending lower for months, prompting some analysts to speculate that the money transfer news could stoke more selling pressure.
In our opinion, the news about the Macau government’s decision to criminalize money exchange activities could bring some noise and lead to near-term share price weakness,” said Citigroup analysts George Choi and Ryan Cheung in a new report.
Under the latest iteration of the “‘Law to Combat Gambling Crimes,” those running money transfer businesses with the primary purpose of serving customers who intend to use the funds at Macau casinos could face up to five years in prison if they don’t have proper licensing.
Money Transfer Rules Could Pinch Premium-Mass Players
Potentially further weighing on Macau gaming equities is the notion that the bettors most likely to use money transfer services are premium-mass players or those who wager more than their mass-market counterparts and less than VIPs.
In the gaming enclave, the premium-mass segment is viewed as more essential than ever to concessionaires because not only do those patrons spend more than mass-market bettors, but also because a previous crackdown on the VIP junket business all but crippled that industry and there’s little to indicate a near-term resurgence is likely.
“Although most players have their own legitimate ways to get their funds over to Macau — and these small money touts are unlikely [to be] the main fund facilitator for premium mass players – we are afraid that this negative news could add uncertainties and hurt the already fragile investment sentiment against the Macau gaming sector,” added the Citi analysts.
The volume of cash exchange by unregulated money transfer operators isn’t known, but Bloomberg reported that in 2023, Macau authorities detained 10K individuals providing related services.
Macau Casino Stocks Already ‘Fragile’
Despite a run of mostly solid monthly gross gaming revenue (GGR) data, a Bloomberg Intelligence index of Macau casino stocks is flirting with 170 today after trading north of 240 in May, underscoring lingering weakness in the group and investor apprehension about the status of the stocks as value plays.
This negative news could add uncertainties and hurt the already fragile investment sentiment against the Macau gaming sector,” observed Choi and Cheung.
The analysts did note that Macau remains one of the top destinations for outbound tourism by Chinese nationals.
Related News Articles
Melco Resorts Stock Could Gain Support from China Audit Accord
Sands Board Departure Highlights Controlled Company Status
Wynn Resorts Credit Rating Upgraded by S&P, Still Junk Grade
Most Popular
SPHERE OF FAILURE: U2 Concert Film is Vegas Orb’s First Flop
VEGAS MYTHS RE-BUSTED: The Strip’s Naked City Was Named for Sunbathing Showgirls
Star Gold Coast Can Recoup $38.7M Debt from Billionaire Ex-Betting Exec
Wynn Las Vegas Strikes $130M DOJ Settlement, Largest Fine Ever for a US Casino
Most Commented
-
VEGAS MYTHS RE-BUSTED: You Don’t Have to Pay Resort Fees
August 2, 2024 — 16 Comments— -
VEGAS MYTHS RE-BUSTED: Elvis Was a Straight-Up Racist
August 9, 2024 — 11 Comments— -
ANTI-SOCIAL BEHAVIOR: Vegas Casino Buffet Stunt in Poor Taste Goes Viral
August 16, 2024 — 7 Comments—
No comments yet