Macau to begin public gaming consultation ahead of planned rebidding of casinos

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Macau to begin public gaming consultation ahead of planned rebidding of casinos

People with masks walk in front of Casino Macau before its temporary closing, following the coronavirus outbreak in Lisboa.

Hong KONG Reuters - Macau's government should begin a 45-day public gaming consultation starting on Wednesday as it tries to gauge public consensus ahead of a closely watched rebidding of its multi-million dollar casinos next year.

Lei Wai Nong, secretary for economy and finance in Macau's biggest gambling hub, said the government will further promote the sustained and healthy development of the gambling industry as there were still some deficiencies in industry supervision.

At a press briefing held on Tuesday, Lei detailed nine areas for the consultation including the number of licenses to be given, increased regulation and protecting employee welfare as well as introducing government representatives who regulate day to day operations at the casinos.

A Chinese special administrative region, Macau has massively tightened scrutiny of casinos in recent years with authorities clamping down on illegal capital flows from mainland China and targeting underground lending and illegal cash transfers.

Macau has also intensified a battle on cross-border flows of funds for gambling, affecting the financing channels of Beijing's junket operators and their VIP casino customers.

In June this year Macau more than doubled the number of gaming inspectors and restructured several departments to ramp up supervision.

He, an analyst at J.P. Morgan in Hong Kong, said they were downgrading all Macau gaming names from neutral to overweight due to higher scrutiny on capital management and daily operations pending the license renewal.

We admit it is a real signal, while the level of actual regulation execution still remains a moot point, added he that the announcement would have already planted a seed of doubt in investors minds.

George Choi, an analyst at Citigroup in Hong Kong, said that while the public consultation document offers limited details, the suggested revisions enhance long-term sustainable growth for the industry with positive implications on six casino operators He cautioned however that we will not be surprised if the market focuses only on the potentially negative implications, given weak investor sentiment Shares in U.S. casinos with operations in Macau fell heavily on Tuesday, with Las Vegas Sands and Wynn Resorts down over 12% on concerns over tighter regulation.