Reaction to Macau gaming laws changes exaggerated, analysts say
Analysts say the fall in Macau casino operators’ stocks after the government suggested changes to the current city’s gaming laws was unwarranted.
Macau.- A group of experts and analysts consulted by Macau News Agency believe the market reaction to possible changes to Macau’s gaming laws was excessive.
Reports of a possible change in current gaming laws caused Macau casino operators stocks to fall sharply this week. Sands China saw a 32.51 per cent drop in its shares while Wynn Resorts’ share price declined by 10.85 per cent.
Carlos Siu Lam, Macao Polytechnic Institute gaming industry researcher, said that the level of investor pessimism was excessive, adding that the situation has improved when compared to the last year when the Covid-19 pandemic started.
He said the gaming law proposals were not surprising, saying: “the money laundering regulations, the new structure of Gaming Inspection and Coordination Bureau (DICJ) in mid-June. With the appointment of new chiefs, DICJ is better prepared for the future.”
Alidad Tash, managing director at 2nt8 Limited, also said the proposed changes were no surprise. However, he admitted the lack of clarity around the government’s intentions had brought uncertainty.
Macau has said the current status of sub-concession rights will be cancelled, however, it did not state the possible number of permitted concessions, even if the sub-concession rights will be converted to full concessions.
One issue that the authorities did not clarify in the document is the possible duration of new concessions. The Macau government seems to imply that the current 20-year duration may be too long.
Tash said: “The fact that the next set of licenses won’t be 20 years was expected, but seeing it explicitly stated scared off the non-professionals.”
Sandford C. Bernstein said: “It is not yet announced how many concessions will be granted but to us, it is clear there will be at least six and the chances of additional concessions are low as the government repeated the mantra of sustainable development.”
