Asia’s Casino Fortunes Falter As Macau Threatens Crackdown On Gaming
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Several of the region’s wealthiest casino moguls saw their fortunes tumble this week after officials in Macau launched a regulatory review that threatens to tighten the government’s grip on “Asia’s Las Vegas.”
The Macau government said on Tuesday that it’s seeking to re-evaluate the laws that govern the world’s largest gambling hub. The 45-day public consultation covers issues including the number and the duration of licenses for casino operators, as well as the introduction of government representatives to supervise gaming operations.
Hong Kong’s Lui Che Woo and his family were hit hardest by the news. Shares of their locally listed Galaxy Entertainment Group plunged 18% after the announcement was made, wiping out $2 billion of the Lui family’s fortune. The clan is now worth $11.5 billion, according to the Real-Time Billionaires List.
Two other moguls in Hong Kong who saw their stocks tumble were Lawrence Ho and Pansy Ho, scions of the late Stanley Ho, who was dubbed the “King of Gambling” for building Asia’s largest casino empire. Lawrence’s net worth dropped $230 million to $1.4 billion after shares of his Hong Kong-listed Melco International Development dropped 17% since Tuesday.
Pansy’s wealth dropped by $280 million after shares of MGM China Holdings plunged 28.3% in Hong Kong over the past three days. Her net worth now sits at $3.4 billion.
The regulatory overhaul aims to strengthen supervision of concessionaires, facilitate the development of the gaming sector and enhance its competitiveness, Macau authorities said. They pointed out that the robust development of the gambling sector has led to uneven economic growth and other issues such as inflation and soaring property prices. The government also said that it wants the casino operators to diversify into more non-gaming offerings.
The announcement comes less than a year ahead of the expiry of the 20-year concessions granted to Macau’s casino operators. MGM China, SJM Holdings, Sands China, Wynn Macau, Galaxy Entertainment and Melco Resorts will have to rebid for their licenses, which are set to expire in June 2022.
More regulations had already been expected as the license renewal deadline comes closer, but the surprise for many was the large number of issues the government wants to cover, said Bloomberg Intelligence gaming analyst Angela Hanlee. “Possible tightening in supervision such as the introduction of government representatives may increase the operating expenses of casino operators,” she wrote in a note.
However, Hanlee doesn’t foresee any significant disruptions to Macau’s most important industry. “Since the government is looking for stable gaming market size and tax revenue from casinos, we think all casino operators may continue running casinos,” she added.
Macau has recently been ramping up supervision of its casinos to shore up its capitol controls. In June, the Chinese enclave doubled the number of inspectors charged with monitoring the casinos. The recent announcement is a blow to the gambling hub at a time when its casino-driven economy was already suffering a downturn stemming from pandemic-induced travel restrictions.
