Macau Sands


Interesting development: Macau stocks got slammed last night.

Wynn Macau fell 5%.
Sands China fell over 4.4%
SJM lost 5.8%.


There is reportedly a crackdown happening on allegedly corrupt Junket Operators, the companies that bring in high-rollers for the casinos for a fee.

Says FT:

Pang Yufeng and Qin Xi Xin, two individuals who bring high-rollers from the mainland to the VIP rooms in Macau casinos and then collect the gambling debt in return for a commission, were arrested in recent weeks, according to the Wall Street Journal. Reuters also reported that more than half a dozen of these agents were arrested at Wynn Macau’s properties last month, possibly in relation to money laundered by Bo Xilai, the disgraced former Chongqing chief.

Hoffman Ma, deputy chief executive officer of Ponte 16, a Macau casino, said he didn’t believe that any recent arrests would have to do with Xi Jinping being at the helm in Beijing. He said the VIP sector started to slow down half a year ago, which was a sign that a general crackdown against illegal fund flows had begun in Macau.

Macau is seen as something of a tell on China as a whole.

Gaming revenues are a decent proxy for the total economy. A crackdown on doing business may be a sign of a more aggressive move to stamp out corruption.

Jim Chanos has made a big point about Macau as essentially functioning as China's big money laundering destination.