A Beijing newspaper report – offering commentary from Chinese officials on the social ills of Chinese people going abroad to gamble – is being linked with major sell offs on Thursday in the stocks of several South Korean casino operators, said a note from Union Gaming Research Macau Ltd.
But the research house added that in its view the article had no bearing on the Chinese central government’s position regarding Macau.
“…we think it is important to point out that Macau was mentioned in passing, but was not mentioned as a place that preys upon Chinese persons. As such, we do not believe Macau is a target of this article although media and investors seem to be drawing this conclusion,” stated Union Gaming analysts Grant Govertsen and Felicity Chiang.
South Korea’s Paradise Co Ltd fell 12.23 percent to KRW24,750 (US$22.18) per share by the close of trading on Thursday on the Korea Stock Exchange in Seoul.
Fellow casino operator Grand Korea Leisure Co Ltd (GKL) slipped 9.69 percent to KRW35,400 on the day.
Paradise is investing in a US$1.7 billion new casino resort near Incheon International Airport on the strength of demand for gambling among players from neighbouring countries including China and Japan.
Chinese VIP players accounted for 66.1 percent of table drop at Paradise casinos during the third quarter of the year, the firm said in its third quarter 2014 results on November 6.
Paradise currently runs five foreigners-only casinos in South Korea.
GKL operates three foreigners-only casinos in South Korea under the Seven Luck brand. Two are in Seoul, and one is in the southern port city of Busan.
Union Gaming said in its note: “…the article pointed to casinos on Korea’s Jeju Island as being troublemakers who prey upon Chinese customers and cause them various troubles (bankruptcies, families falling apart, etc.).”
South Korea’s Chosun Ilbo newspaper reported earlier this year that four Chinese tourists staged a protest at Jeju airport after a casino on the island refused to pay them baccarat winnings of KRW1.1 billion because of suspicions that they cheated.
Union Gaming additionally said in its latest note that media and other analysts’ reports of a clampdown on transit visas to Macau were “likely overblown” after the research house made a visit on Thursday to the mainland side of the Gongbei border gate.
Union Gaming stated: “The bottom line based on our observations is that we do not think there have been any material changes to the transit visa scheme (beyond the restrictions already implemented this past July) and it is unlikely that thousands of visitors are at risk and being turned away every day.”
The analysts added: “ However, it seemed clear that those persons wanting to use the transit visa scheme could spend a few extra hours in line due to the increased document checks, which ultimately could dissuade some visitation due to the inconvenience of waiting.”
Union Gaming also said it thought reports of mainland official Li Fei’s comment made in Macau about the need for the city to wean its economy off gambling was “nothing new and has been sounded time and again by government officials”.
Jun 25, 2019Macau and Philippines casino operator Melco Resorts and Entertainment Ltd is acquiring all of its parent’s interest in the entity developing the City of Dreams Mediterranean casino resort (pictured...
Jun 24, 2019
U.S. regional casino operator Eldorado Resorts is paying to acquire Las Vegas giant Caesars Entertainment