UPDATE 2-Macau gov't to regulate the building of casinos

Tue Mar 16, 2010 12:53pm EDT

* Will monitor growth of gambling industry

* Casino stocks in Hong Kong end down as much as 2 pct

* Sands, Wynn, MGM Mirage shares gain in U.S. (Adds U.S. casino stocks' performance in paragraph 6)

By Donny Kwok and Sui-Lee Wee

HONG KONG, March 16 (Reuters) - Macau will seek to regulate the building of new casinos, its chief executive said, a sign that the government is trying to temper overheating in the world's fastest-growing gambling market.

Macau Chief Executive Fernando Chui's comments could brighten the outlook for existing casino operators, including Las Vegas Sands (LVS.N) and Wynn Resorts (WYNN.O) and their locally listed units Sands China (1928.HK) and Wynn Macau (1128.HK). Potential curbs would help profits by limiting oversupply.

"Apart from those we have agreed in principle in the past, in construction and those already approved, we will regulate (approval of the building of new casinos) in the future," Chui told a news conference on Tuesday after delivering his first policy address.

He also said the government plans to set up a regulatory body to monitor the growth of the gambling industry.

Shares of U.S.-listed casino companies operating in Macau were higher on Tuesday after weakening on Monday amid wariness that the Chinese city's new chief executive could unveil a 2010 policy plan that caps its fast-growing gambling industry. [ID:nN15207812]

Las Vegas Sands shares were up 4.9 percent on the New York Stock Exchange, while Wynn Resorts gained nearly 3 percent. MGM Mirage (MGM.N), which plans a public offering of its Macau joint venture, was up 5 percent.

In Hong Kong, shares of casino operators ended down between 0.2 percent and 2 percent.

Macau, once a Portuguese colony and now a special administrative region under Chinese rule, has repeatedly sought to rein in the explosive growth in the only market in China where gambling is legal.

Earlier government strictures, dating from April 2008, included a moratorium on new casino licenses, a building freeze and a cap on visas to mainland Chinese visiting Macau, moves seen as motivated by an increasingly concerned Beijing.

The Macau government is unlikely to make new gambling concessions available, the territory's chief gambling regulator told Reuters in an interview in January. [ID:nTOE60I0A5]

Gambling revenue in Macau, which passed Las Vegas several years ago to become the world's No.1 gambling centre, rose nearly 70 percent in both January and February compared with a year earlier.

Other Macau casino operators include Galaxy Entertainment Group (0027.HK), SJM Holdings Ltd (0880.HK), Melco Crown Entertainment Ltd (MPEL.O) and a casino run by MGM Mirage and local businesswoman Pansy Ho.

Separately, Chui said Macau will speed up the development of public housing in a bid to cool its red-hot property market. (Reporting by Donny Kwok and Sui-Lee Wee; Editing by Chris Lewis and John Wallace)

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