Today, Macau casino stocks marked a significant increase that resulted from the announcement that the Government of mainland China will start reissuing tourist visas after the coronavirus lockdown closed the entire industry, resulting in an enormous 90% decline in the country’s gambling revenue.
Some of the main casino operators in the country saw an increase in their stock value, with Sands China marking an almost 10% surge that, according to Bloomberg reports, has been its largest one in 20 months. Galaxy Entertainment marked a 5.5% stock value increase, while Wynn Macau, MGM China and SJM Holdings each saw an increase of about 5% at the end of today’s trading.
As revealed by the Macau government yesterday, the first city of mainland China that is to reissue tourist visas as of August 12th, is the city of Zhuhai. The Secretary for Social Affairs and Culture of Macau revealed that the Special Administrative Region, which is the only place in China where casino gambling is legal, is collaborating with mainland authorities to also resume its full visa program, but also warned that the process could be suspended in case the coronavirus infection returns.
The intentions of the local authorities to resume the process of issuing tourist visas are a massive step forward, because individual and group tours accounted for respectively 47% and 23% of the overall mainland arrivals to Macau before the coronavirus infection hit the country. These visitors were also considered the key driver of the city’s gross gaming revenue.
Galaxy Entertainment Could Benefit Most from Tourist Visas Reissuing
The Covid-19 outbreak has seriously hit gambling companies that operate casino venues in Macau, especially taking in mind their multi-billion investments into making their casinos attractive to the region’s visitors.
Now, with the tourist visas set to be reissued, some experts believe that Galaxy Entertainment would be in an especially strong position. As shared by Angela Hanlee, senior analyst at Bloomberg, the broad market positioning of Galaxy Macau would provide the casino operator with the chance to shift its focus from high-roller customers to a more mass-gaming approach, considering the massive losses during the coronavirus outbreak. According to Ms. Hanlee, such an approach would make it the best-positioned casino operator that could benefit from potential tourism sector recovery in Macau.
According to some market analysts, the resumed tourism visas will not affect Macau’s gambling revenue immediately by the end of the month. Some experts believe that the gaming revenue of the region will continue to keep a 90% decline in August, with the entire Guangdong province expected to be next in line to resume its individual visit scheme. Analysts say that some provinces, which do not have new confirmed coronavirus cases could follow suit. For the time being, 14 out of the 10 provinces with cities eligible for issuing individual visit schemes have not had new confirmed Covid-19 cases.
