Shares Plunge in Macau Gaming
15 October 2009
The government of Macau has caused the financial world a mild heart attack. They have announced that they were going to raise the minimum entry and employment age for the casinos from 18 to 21. They also announced a cap to the total number of gaming tables in Macau and also relocated slot machines to commercial areas. By the middle of this year, there were 4390 gaming tables in Macau. A bill to raise the age limits wills be submitted to the Legislative Assembly within a few months.
The Secretary for Economy and Finance for Macau, Francis Tam Pak-yuen stated that the changes had been discussed with the six gaming concessionaires and had their blessings. But the problem wasn’t with them, but with the investors. SJM Holdings shares fell as much as 8.5 percent, before closing out the day at HK$4.43, down 3.7 percent. Melco International Development closed down 4.3 percent, at HK$4.93.
In the U.S., Las Vegas Sands shares fell 1.8 percent to close at $17.72 and Wynn shares went down 2.9 percent to $65.88 in trading in New York on Monday.
Some stock analysts say that the changes are not all bad. And that they will recommend to investors to buy on the dips. Many agree that overexpansion of the gaming industry in Macau would harm it. With so many gaming tables in Macau, many are sitting unused and employees have been laid off because of it.
It is now a wait and see, game between Macau, China, the investors and the gaming public