If a clampdown on Chinese citizens visiting Macau is in the works, Macau officials claim to be in the dark about it. On Wednesday, the day after casino stocks took a steep drop on rumors that the southern Chinese province of Guandong was planning to restrict the number of travel visas, officials at the Macau Government Tourism Office told Bloomberg they “have not received any notice on China tightening visa issuance to visitors traveling to Macau.” Nearly all the affected stocks rebounded on Wednesday, except Melco Crown, which fell an additional 1.4%.
Analysts, meanwhile, have come up with alternative explanations for the suggestion that visa issuances were drying up. Goldman Sachs said the visa offices were simply backed up due to the seasonal rise in tourists traveling abroad. Goldman also dismissed suggestions that the hefty reduction in maximum withdrawals allegedly about to be imposed by credit card outfit China UnionPay would have a significant impact on Macau casinos’ bottom line. The reported 1m yuan cap ($157k) obviously wouldn’t affect mass market customers and Goldman’s stats suggest the average high-roller loses about 800k yuan per day of a standard three-day visit. Regardless, we’re sure those helpful junket operators are developing contingency plans.
PUTTING THE CAN’T IN CANTOR
The outlook is far less rosy for US sports betting operator Cantor Gaming. Last week, Howard Lutnick, CEO of Cantor Gaming’s parent company Cantor Fitzgerald, went on Bloomberg to proclaim that his sportsbook subsidiary would be making a bold move into Macau. Lutnick said the fact that Cantor Gaming operates sportsbooks at Nevada casinos owned by some of the same companies that operate in Macau would make the process of gaining a Macau operating license “much more easy.” While Lutnick conceded this might “take a while,” he probably wasn’t thinking ‘a while’ would mean three years at the earliest.
On Tuesday, Francis Tam, Macau’s secretary for economy and finance, published an executive order extending the de facto monopoly on sports betting held by Macau Slot aka Sociedade de Lotarias e Apostas Mútuas de Macau Lda by another three years. Controlled by Stanley Ho’s old outfit Sociedade de Jogos de Macau (SJM), Macau Slot has held the gambling enclave’s sports betting concession since before the millennium and will continue to do so until at least June 5, 2015. Every one of Macau’s casino license holders is technically permitted to offer sports betting, but Macau Slot holds the exclusive right to set the odds, which has discouraged any of the big players from seriously considering the opening of a dedicated sportsbook.
It’s impossible to determine what impact, if any, Lutnick’s public musings may have had on the Macau authorities’ decision to re-up with Macau Slot, but consider this. Since 2009, Macau Slot had received a series of one-year extensions to its monopoly, suggesting the authorities were wrestling with the notion of how best to open up this sector to competition. Then Lutnick goes on TV, counting his chickens, and POW – no soup for you. Draw your own conclusion.