February 6, 2013 / 5:11 AM / 5 years ago

Macau gambling stocks slide as report sparks fears of fresh crackdown

HONG KONG, Feb 6 (Reuters) - Macau gambling stocks such as Sands China Ltd and Galaxy Entertainment Group Ltd fell on Wednesday after a media report said Beijing may crack down on junket operators that bring in Chinese VIP high-rollers, arrange credit and collect debts.

The UK Times, quoting unidentified law enforcement sources, said authorities were planning to launch operations in more than six big Chinese cities as part of an anti-corruption campaign led by president-in-waiting Xi Jinping.

Shares of Las Vegas tycoon Sheldon Adelson’s Sands China, which had gained 81 percent since it hit a low in July 2012, fell 6.1 percent on Wednesday. Galaxy Entertainment, U.S. gambling magnate Steve Wynn’s Wynn Macau Ltd and MGM China Holdings Ltd all fell more than 7 percent, lagging a 0.6 percent gain in the benchmark Hang Seng Index .

Melco Crown Entertainment Ltd plunged nearly 6 percent and Macau kingpin Stanley Ho’s SJM Holdings Ltd fell 7.6 percent.

The Times said the crackdown would take place after Chinese New Year, which runs for a week from Feb. 10. The plan is to target junket operators who take VIP gamblers from mainland China to Macau and are a main conduit for siphoning money out of China.

Macau raked in $38 billion in annual gambling revenues last year. The tiny former Portuguese enclave, about an hour away from Hong Kong by ferry and with a population of half a million, is the only place where people can legally gamble at casinos in China.

Late last year, Chinese authorities pressed Macau to step up scrutiny of money transfers and promote “responsible gaming” in the casinos of the world’s largest gambling hub.

Hoffman Ma, deputy chairman of Success Universe Group Ltd , which has a joint venture with Stanley Ho’s SJM Holdings, said in December the Chinese government had called for tighter governance of money flows.

China’s state news agency Xinhua said on Wednesday that radio and television stations would ban advertisements for expensive gifts such as watches and gold coins, as part of a government push to crack down on extravagance and waste.

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