Macau stocks have been on a losing streak for two years. Investors are hoping to finally turn the tables: Proposed changes to the city’s gambling laws appear to be much milder than expected. But ultimately the gambling hub’s fortunes—and those of its casinos—depend on the large-scale return of Chinese travelers. That could be a while yet.
Shares of Macau casino operators have jumped by an average of 13% since the city’s government unveiled draft revisions to its gambling laws on Friday. Sands China shares are up a full 20%. The length of new casino licenses will be cut by half to 10 years after current ones expire in June, but some of the harshest proposals in the consultation documents released in September aren’t included in this latest draft. For example, the government won’t, as originally stipulated, appoint representatives to supervise the casino operators directly. And distributing profit to shareholders will no longer require government approval, as originally threatened. The Macau government is also setting the new number of licenses at six, meaning it is possible for all current operators to get one.
