China Just Blew Up the Casino Market in New Regulatory Crackdown
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China is considering new regulations for casinos in Macao. Wall Street is downgrading the sector. Las Vegas Sands is one of the biggest losers. The resort operator sold all of its remaining U.S. properties to go all-in on Asia. Sands has operations in Singapore and Japan. It is almost wholly dependent on China for its survival.
Beijing is targeting businesses influenced by Western culture. The Chinese government is turning its attention to the casino industry. It is reporting revenue more than 80% below 2019's level and August gaming revenue was 47% lower than July.
Wynn Resorts and Melco Resort & Entertainment are at risk of losing revenue and profits. Las Vegas Sands is making a big bet on the region. Melo is also dependent on Macao. Galaxy Entertainment and SJM Holdings are also at risks.
The industry is facing a new regulatory regime. The proposal would do away with sub-concessions to keep growth in check. MGM Resorts has the least exposure to China and derives most of its revenue and profits from Las Vegas and other U.S. regional markets.
