Stocks of U.S. casino companies with operations in Macau rose Monday, after China said it will resume granting tourist visas for visitors to the gambling mecca.
Zhuhai city in Guangdong province plans to provide visas for mainland China residents to begin traveling to the island on Aug. 12.
Macau’s gambling revenue has cratered more than 90% in each of the last four months amid the ban of Chinese tourism there, according to Morgan Stanley, Bloomberg reports. Casinos have suffered expense losses of $15 million per day as a result, the report says.
Macau has been closed to tourists since March.
MGM (MGM) - Get Report recently traded at $21.67, up 14.03%, and has dropped 43% so far this year. MGM had additional positive news this morning that IAC (IAC) - Get Report had taken a 12% stake in the company worth about $1 billion.
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 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,” they said.
Morningstar analyst Dan Wasiolek wrote last month of Las Vegas Sands: “we view the company as well positioned for long-term growth in the gaming industry because of the attractive long-term growth opportunity of Macau.”