{"id":1621,"date":"2021-09-17T13:38:32","date_gmt":"2021-09-17T20:38:32","guid":{"rendered":"https:\/\/wagers.com\/staging\/4285\/?p=1621"},"modified":"2021-11-01T13:42:41","modified_gmt":"2021-11-01T20:42:41","slug":"asian-gaming-shock","status":"publish","type":"post","link":"https:\/\/wagers.com\/staging\/4285\/news\/asian-gaming-shock\/","title":{"rendered":"Asian gaming shock"},"content":{"rendered":"

Xi who must be obeyed:<\/strong> This week\u2019s Chinese government proposals for tighter regulations in Macau knocked a record $18.4bn in combined share price value off Macau\u2019s gaming operators. The new rules will include increased supervision of operators\u2019 daily activities around VIPs and junkets, a raised level of local ownership, restrictions on dividend payments and the reform of sub-concessions licensing, potentially reducing the number of licenses and shortening their terms from the current 20+5-year concession system.<\/p>\n

Common people:<\/strong> China says the reforms are part of the \u2018Common Prosperity Plan\u2019 to reduce the wealth gap in the country. However, writing in the WSJ recently, billionaire investor George Soros\u2019s take on these recent moves was that \u201cthe regime regards all Chinese companies as instruments of the one-party state\u201d and this \u201cdoes not augur well for investors.\u201d<\/p>\n

Maximus ominous:<\/strong> Deutsche Bank\u2019s top line was that \u201cthe meaningful ambiguity\u201d will remain until \u201cfurther color is provided\u201d or the new gaming law is made public.<\/p>\n

Although nothing has changed so far, DB said the future impact of such reforms was \u201cfar more ominous than the reality of what has, or in many cases, has not, changed.\u201d With public consultation on the proposals set to last until 29 October, the analyst team at Jefferies said \u201cthe only certainty is stricter capacity control and supervision\u201d.<\/em><\/p><\/blockquote>\n

Unknown unknowns:<\/strong> The concession renewal process and related news were always likely to lead to a bumpy period, but for the team at DB the \u201cdominant narrative\u201d currently is \u201cfear of the unknown\u201d. Investors appear to have taken note of other actions on the part of the Chinese government targeting high-profile business sectors in China, including illegal online gaming, while the stop-start nature of the post-pandemic recovery has been frustrating.<\/p>\n

Shifting Sands:<\/strong> In a note issued in the wake of this week\u2019s events, analysts at Jefferies have downgraded Las Vegas Sands to a hold suggesting the uncertainty around Macau highlights how the company – which divested itself of its Las Vegas Strip operations this year – has left it \u201cwithout alternative avenues of growth.\u201d \u201cNew US license opportunities do not appear to be viable, while the commitment to digital gaming growth appears modest,\u201d they added. The team also lowered their estimates on Wynn Resorts given its exposure to the VIP area which will likely be \u201cmaterially impacted\u201d by the proposals.<\/p>\n

Other hot news today on Earnings + More:<\/h3>\n