Macau Casinos: First Winners Take All

Macau's leader has announced that the Chinese enclave, which has developed as the largest casino gambling center in the world, surpassing even Las Vegas, will hold on new gambling licenses.

The effect could easily have turned out negative, as casino gambling may suffer a blow and a halt to its impressive expansion. But that was not the case.

Instead, shares of casino operators that already hold properties in Macau, such as Las Vegas Sands Corp. and Wynn Resorts Ltd. have climbed following the Chinese leader's comment.

No further casino concessions (or sub-concessions, for that matter) would be issued in the near future, said Edmund Ho to his countrymen lawmakers. This decision will affect the existing operators still, as no new applications for additional gambling tables or slot machines will be granted either.

Macau: The Making of a Gambling Capital
Once a Portuguese territory, Macau is only 60 kilometers (40 miles) west of Hong Kong. It is the only area in China that allows gambling by law. Since ending the monopoly that casino magnate Stanley Ho has enjoyed, in 2002, Macau has issued six additional casino licenses to several operators, including Ho.

This liberalization has helped stabilize Macau's economy, according to Edmund Ho. "We're now at a stage to review and estimate the development of the industry," he has added, with regard to the effect it has had on living conditions of the inhabitants of the area.

Macau-based casinos have pulled in over $10 billion in revenues last year.

Stocks Rise
Following the announcement, shares of Las Vegas Sands Corp. jumped 9.2 percent, Wynn Resorts Ltd. rose 7.4 percent, and MGM Mirage 3.4 percent.