Macau casinos gain revenue but stocks continue to dip
Simon Cheung, an analyst with Goldman Sachs said that he was surprised at the remarkable casino gains of some 44% reported in the local news. He thinks that it may well be as a result of Chinese residents who had approved visas to visit Macau in the past few weeks.
Karen Tang of Deutsche Bank says while the casino growth rate is up from July’s 42%, she only expected a 25 to 30% increase. She also said that the visa restrictions have forced the year- to-date growth rate down. The Chinese government is trying to control the growth of the gambling industry in Macau and will be passing new regulations regarding Chinese visitors to the gambling mecca.
Currently Chinese residents from the mainland may only visit Macau once every two months and it seems that the Chinese government are considering restrictions to lower even that number of visits as from October.
Analysts are cautious on the outlook for casinos in Macau due to the stricter policies from the Chinese government but are playing a wait and see game for the moment. Some of the main casino operators in Macau are Wynn Resorts Ltd, Las Vegas Sands Corp, MGM Mirage and Melco Crown Entertainment Ltd. All these casino operators reported a dip in their share indexes.
There is some good news though, new regulations allow for direct flights from mainland China to Taiwan and this would result in Macau being able to handle more incoming flights. Macau traditionally served as a stopover point between the two regions.