Casino Shares Jump as Macau Allows Chinese Tourists Again

U.S. casino operators saw their shares rise on Monday after Macau began allowing Chinese tourists again. China announced that it will resume granting tourist visas for visitors to the gambling mecca starting on August 12th. The area had been closed since March.

Macau’s gambling revenue has fallen 90% in each of the last four months amid the ban of Chinese tourism there, according to Morgan Stanley and Bloomberg reports.

Las Vegas Sands saw gains of 7.31%, Wynn Resorts was up 8.34, and MGM was up 14.03%. MGM incidentally also had positive news announcing that IAC had taken a 12% stake in the company worth about $1 billion.

“We are energized and excited to make this investment in MGM,” said IAC leader Barry Diller, adding that IAC is particularly interested in “an area that currently comprises a tiny portion of its revenue — online gaming.”

IAC CEO Joey Levin added that “MGM Resorts presents a unique opportunity for IAC to own a meaningful piece of a preeminent brand in a large category with immense potential,” noting IAC plans to be “a minority investor and a long-term strategic partner.”

Jefferies analysts see Macau’s opening as important for the casino industry. “We believe this is the first significant step to GGR [gross gaming revenue] recovery, as we expect other Chinese cities to follow in phases, similar to recent Guangdong phased quarantine relaxation,” they wrote in a commentary which was cited by Bloomberg.

Individual visa tourists make up 47% of Mainland visitors to Macau, and group tours 23%, the analysts said. Those two sectors represent the “key driver of GGR,” said the analysts.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.