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Macau casino stocks collapse as China contemplates regulatory crackdown

On Tuesday, Macau announced a 45-day public consultation that observers say will lead to tighter regulations on the lucrative gaming industry in a continuation of the recent crackdown on private companies by Chinese authorities.

Shares of US casino companies that operate in Macau – the only place where gambling is legal in China – have slumped in response to the news. Sands China (SCHYF) was down more than 32% in Hong Kong, while Wynn Macau (WYNMF) plunged more than 28%, and MGM China (MCHVF) fell more than 26%.

The government of the semi-autonomous Chinese territory was considering changes in nine areas, Macao Economic and Financial Secretary Lei Wai Nong told reporters. These areas include the number of gaming licenses issued and their duration, a stricter review mechanism for operator approval and employee welfare.

The authorities also wish to consider promoting “projects with elements not related to the game”, according to an official statement.

“[The Macao] The government has decided to conduct a comprehensive review and improvement of the existing legal system on the basis of past regulatory experience, the current situation of the gaming industry and Macao’s economic development, “the statement said.

Investors have already been frightened by Beijing’s ongoing crackdown on industries ranging from technology to gaming, which has wiped out as much as $ 3 trillion in the market value of the nation’s largest companies.
Gambling is the lifeblood of Macau, which depends on millions of visitors from mainland China. But since last year, Covid-19 has threatened the economic model at the heart of Macau’s economy.

– CNN’s Beijing office contributed to this article.