Las Vegas Sands, Wynn Stock Slump As Macau Takes Aim At Casinos
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Las Vegas Sands (LVS) - Get Las Vegas Sands Corp. (LVS) Report lead U.S. casino shares lower Wednesday after officials in Macau planned major changes to rules governing operations in Macau, the world's largest gaming hub.
In what appears to be the latest crackdown on powerhouse sectors in the world's second largest economy officials in Macau, a Special Administrative Region of the People's Republic of China told casino operators Wednesday they could revise current rules for next year's auction of gambling licenses to possibly include "government supervision" of their day-to-day operations.
Lei Wai Nong, Macau's secretary for economy and finance, launched a 45-day public consultation process Wednesday that may also include new rules on the distribution of profits to shareholders. He also suggested the government could "maintain or even reduce the number of concessionaires" in next year's bidding process.
Macau's gaming market generates around $37 billion in annual revenues, around five times more than the collective take of the Las Vegas strip.
Wynn Resorts gets around 70% of its overall revenues from Macau, while Las Vegas Sands gets around 62%.
Las Vegas Sands shares were marked 6.4% lower in early trading Wednesday to change hands at $36.25 each. Wynn Resorts meanwhile, tumbled 9.8% to $83.22 each.
MGM Resorts International MGM shares were marked 3.55% lower at $40.32 each, a move that still leaves the casino and hotels group with a year-to-date gain of around 26%.
In Hong Kong trading, Wynn Macau plunged 34% to a record low of HK$6.40, while China Sands, Galaxy Entertainment and Melco Entertainment all tumbled between 20% and 23%, hiving a collective $14 billion in value from the sector's shares.
