Macau Casinos: Time To Place Your Bets
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Macau's gambling revenue fell by 44% this year. The market share of Macau-based casino operators has declined. Macao's pandemic policies mirror those of Mainland China. Maca's remaining pittance comes from Chinese nationals. There are few foreigners in Macua, so it's difficult to cross the border. Melco Resorts & Entertainment is down 72%. Galaxy Entertainment has only 20% decline. It's time to place bets on Macu. iReport.com: iReporter shares. Share price of the 6 MacAus' casino companies has fallen by more than 50%.
There are signs of policy relaxation on COVID-19. Hong Kong was able to cancel its hotel quarantine for inbound travelers recently. Macau's comatose economy depends solely on Mainland gamblers. Any relaxation of international borders would put Macao in conflict with China's zero-covid policy. Maca can't open up until China opens up. There is some encouraging sign. Xi Jinping and other senior leaders went face-commando at a gathering during the National Day celebration.
The gambling concessions for all 6 casino operators in Macau expire this year. There are 7 companies bidding for 6 spots. The winner will be announced by the beginning of December. The loser may need to liquidate their properties in the city. China will let Americans keep 3 of the 6 gambling concessionaires. However, there is a risk that one of them will have to be cut to make room for Genting.
It's too difficult to pick a winner among the 3 US operators in Macau. Melco Resorts and Entertainment is local majority owned and reasonably valued. It's the only Macao pureplay listed on NASDAQ. It has a better liquidity than the rest as it is the US-listed. The company is collaborating US auditors on audit inspections. There is potential for significant return when some of the catalysts mentioned in this article actualize. Maca's gaming industry has changed since the last time it was profitable in 2019. New regulations with an emphasis on family-oriented activities are expected to change the industry.
