Macau gaming stocks plunge on VIP junket operator crackdown report
Beijing plans to launch late this month a clean-up of "triad-linked junket operators" who make a profit by bringing in mainland high-rollers to casinos in Macau and lending them money, a British newspaper reported, quoting unnamed law enforcement sources as saying.
Macau gaming stocks plunged after a media report warned of an impending crackdown on VIP junket operators, but they were off their intra-day lows after analysts cast doubt on its credibility.
Beijing plans to launch late this month a clean-up of "triad-linked junket operators" who make a profit by bringing in mainland high-rollers to casinos in Macau and lending them money, a British newspaper reported, quoting unnamed law enforcement sources as saying.
The drive would involve police operations in at least seven large mainland cities and is part of an anti-corruption drive led by president-in-waiting Xi Jinping, The Times said.
Casino operators SJM Holdings, Galaxy Entertainment, MGM China, Sands China and Wynn Macau tumbled 5.2 per cent to 6.8 per cent yesterday. MGM China fell as much as 7.7 per cent but closed just 0.3 per cent lower.
"We have our reservations on the said article," said an Asian brokerage analyst. "We do not believe this is an industry-wide crackdown, but rather one targeting off-casino side-betting junkets that are triad-linked and flouted the laws by engaging in … money-laundering."
We do not believe this is an industry-wide crackdown, but rather one targeting off-casino side-betting junkets
When news broke in December that junket operators with ties to disgraced political leader Bo Xilai were detained by police, gaming shares were sold heavily. However, December was the highest grossing month for the industry, the analyst pointed out.