Macau casino stocks tumble as city proposes gambling industry crackdown

[HONG KONG] Macau casino stocks collapsed on Wednesday, as officials unveiled plans for a crackdown on the gambling industry in the city known as China's Las Vegas.

Hong Kong-listed operators Sands China and Wynn Macau both suffered over 24 per cent drops, while Melco Entertainment, SJM Holdings, MGM China and Galaxy Entertainment fell between 13 per cent to 17 per cent.

The share price tumble came as the Macau government launched a 45-day public consultation Wednesday about proposals to increase direct supervision over the gambling industry, which has faced increasing scrutiny from authorities in recent years.

The Macau government is looking to put its representatives in licensed casino operators' boards to oversee their operations and criminalise underground banking in the industry.

The companies that could face tighter restrictions as a result of the proposals own the six licences permitted to run casinos in Macau - the only place in China where gambling is allowed.

Their licences will expire in June 2022, when the companies will have to bid to renew them.

Macau depends almost entirely on gambling revenue, raking in more in a single week than Las Vegas makes in a month.

As the only place in China where gambling is allowed, Macau's casinos account for about 80 per cent of government revenue, and over 55 per cent of the city's GDP.

More than 82,000 people worked in the industry by the end of last year, accounting for over 17 per cent of the city's working population.

While acknowledging the gambling industry is the city's lifeline, the Macau government said it is concerned by the local economy's overreliance on the industry and the associated inflated costs of living and doing business.

AFP