Donny Kwak

HONG KONG, (Reuters) – Shares in Macau’s most prominent casino operators surpassed HK$65.53 Billion ($8.42Billion) Monday. This is 15% of their market capital. The government of Macau, the largest global gambling hub, has maintained the six-license limit.

Six Macau-based casino operators saw 9.9% increase in their value by closing the Hong Kong market. That’s HK$42.2billion. The overall market value of all the market participants was HK$469billion. The rally was led by Sands China (OTC)

The shares of Sands China Ltd climbed as high as 22.3% and ended the day with a 14.6% gain. This is their largest daily percentage gain since Oct 2011. This compares to a 0.7% drop in benchmark.

Wynn Macau (OTC:), which rose as high as 19.1%, closed down 11.9% on its best day in March 2020.

Macau’s government has announced that there will only be six casino operators permitted to work in Macau. This is with an operating duration of 10 years.

Citi stated in a research note that the regulatory announcement clarifies key investor concerns, such as government oversight and minimum shares by Macau permanent residents.

In terms of the amount wagered, this former Portuguese colony is world’s largest gambling hub.

Macau increased scrutiny of its casinos significantly in the last few years. Authorities have been clamping down heavily on illegal capital flows from China, and targeting illicit lending and cash transfers.

U.S. casino operator Sands China, Wynn China, MGM China (OTC), and Melco saw their market values rise to as high as HK$43.23 Billion ($5.55 Billion in Hong Kong).

Following clarifications by the government regarding the gaming law revisions, Citi has raised the target prices for six Macau-based casino operators by 8-14%

Shares in Galaxy Entertainment, MGM China and SJM finished between 4.8% to 11.7%.

Jefferies stated in a research note that the proposed bill “would remove the existing sub-concession structures, but would not alter the competition ultimately.”

Jefferies stated that “as the government crackdown continues on junkets, we expect long term pressure on VIP businesses,” Jefferies added, noting that near-term revenue from gross gaming remains bleak due to uncertainties about the timing of the border reopening following recent COVID-19 epidemics in Mainland China and Hong Kong.

($1 = 7.7872 Hong Kong dollars)