Eased Macau Rules Lift Casino Stocks

Visa restrictions have been relaxed in August for visitors looking to travel to the Asian gambling mecca of Macau, according to Chinese press reports.

Investors in Macau casino stocks have worried that the visa restrictions would derail visits from local gamblers making quick trips to the region. The policy was enacted for residents of the Guangdong province of China, a southern region that is close to Macau.

Last year, Macau surpassed Las Vegas as the world's largest gambling market. It is the only area of China where gambling is legal.

According to an article in the Tuesday edition of the South China Morning Post, "visa restrictions put in place following a May 1 protest to prevent mainlanders working illegally in Hong Kong and Macau had been eased this month because of a backlog of applications."

Deutsche Bank analyst Bill Lerner said in a research note Tuesday that this is positive news for Macau gaming operators, since the new policy would allow Chinese mainland residents to once again apply for a combined visa for travel to Hong Kong and Macau.

"The combined visa allows mainland tourists to visit Hong Kong twice during the visa's one-year duration and Macau once," Lerner wrote. "The visa restrictions had impacted business visitors (now must apply for a visa on a quarterly basis instead of annual) and dual Hong Kong-Macao visas (now must have two separate visas, with a longer waiting period), which has now been combined once again."

Macau casino operators rose slightly on the news. Wynn Resorts(WYNN) shares recently were up 3.1% to $115.57, while Las Vegas Sands(LVS) rose 1.4% to $98.34. Melco PBL(MPEL), the one pure play on the Macau casino market, was up 0.6% to $13.16.

>To order reprints of this article, click here: Reprints