Why Melco Crown Entertainment (MPEL) Stock Is Down Today

NEW YORK (TheStreet) -- Melco Crown Entertainment (MPEL) was falling 7.2% to $33.02 Monday after several junket incidents in Macau weaken market sentiments towards casinos operating in the region.

According to a report from Credit Suisse, a principal of a small junket in Macau absconded with between 8 billion and 10 billion Hong Kong dollars ($1 billion to $1.3 billion). The amount is small relative to the Macau gaming market, but can impact market sentiment and slow the velocity of capital and the VIP business according to the report.

Credit Suisse also cited the wife of Cheong Chitai, owner of Naptune Group, one of the top three junkets in Macau, who was detained with liquid assets of 200 million Hong Kong dollars frozen by the police. The Next Magazine article detailing the arrest also said that investigators compiled a list of "20 junket operators who are allegedly assisting corrupt mainland officials in money laundering and around 40 people connected with Neptune Group have allegedly been detained or questioned by HK police since the detention of Mrs Cheong."

Junkets service the VIP segment in Macau, which contributed to about two-thirds of total revenue and about 35% of gaming profit in the region in 2013.

Must read: Warren Buffett's 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates MELCO CROWN ENTMT LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

If you liked this article you might like

UBS Bullish on Macau, Rates Wynn, MGM and Melco as 'Buys'

Strong March Macau Numbers Send Casino Stocks Rising

Las Vegas Sands Is a Good Bet in Macau

Macau January Revenue Up but Falls Below Expectations

Despite Road Bumps, Chinese Casinos Will Still Rebound