Macau Casino Stocks Get a Boost as City Provides 2022 Gaming Update

Gaming operators with a presence in Macau received a last-minute Christmas gift last week. Only weeks after analysts set a reduced revenue forecast for Macau in 2022, the city provided an update on what is likely coming with new gaming laws. That revelation made analysts a little more optimistic, which, in turn, made investors optimistic. All operators in Macau saw their share prices receive a significant boost as the week came to a close.

Macau Casino Stocks Get A Christmas Gift

After Macau authorities released positive results from a public hearing regarding the renewal of casino licenses, Wynn Resorts, Las Vegas Sands (LVS), and MGM Resorts International became more active in trading. The hearings, which began in September, generated positive opinions, with respondents saying that they are happy with current arrangements.

Sanford C. Bernstein analyst Vitaly Umansky wrote, “We still believe the government is wholly set on finalizing the new concessions prior to the June expirations. We do not view anything in the report that raises issues.”

After the results of the public hearing and the input from analysts, Sands increased by 6% to $39.38 and Wynn added 5.5%. MGM rose by 3%. Also, shares of Melco Resorts and Galaxy Entertainment, as well as SJM Holding, increased.

Umansky cautioned that the report is merely a summary of public opinion and does not represent a final decision made by local authorities.

New Licenses Likely in 2022

The outline of the results of the hearings, combined with the city’s input, now makes it seem that 2022 will be able to see the completion of the licensing process. As late as November, there was still some debate about whether another extension would be necessary. However, that now appears to not be the case.

According to a Friday note by JP Morgan Securities (Asia Pacific Ltd.), the publishing of the update on Thursday, well ahead of the six-month deadline, suggests that it is possible to open bidding for a new public tender before the six existing gaming licenses expire in June 2022.

JP Morgan said that the report on the consultation, which was completed in October, was presented much more quickly than had been expected. It was also faster than the allotted time within which the city government had to submit a report after a period of public consultation.

JP Morgan analysts DS Kim, Amanda Cheng, and Livy Lyu said that this indicated the government’s strong desire to conduct license retendering prior to the expiry of current gaming concessions on June 26.

Macau’s gaming laws must be updated before a public tender is possible. Now, the government is expected to present a revised bill at the Legislative Assembly of the city. This will possibly allow for a public tender process next year.

The analysts added that they now believe that license retendering could open in the first half of 2022.