China’s next target is… Vegas?
Well, not directly. But China’s decision to crack down on gambling in Macau (a region in China that has 7x the gambling infrastructure of Vegas) has prompted Wynn Resorts to draw a $1.5 billion line of credit from Bank of China Ltd. 😬 🎲
Wynn commented that the loan would be used to “fund ongoing working capital needs and for general corporate purposes.” Yeah… oof.
The stocks of US casinos operating in Macau tanked this week on the news that China is deliberating regulations on gambling to promote the “healthy and sustainable development” of the industry. Some analysts revised $WYNN’s price target down to $83/share from $104/share.
Jason Ader, CEO of New York-based SpringOwl asset management, commented this on China’s gambling crackdown:
“There’s a debate over whether China is even investable right now. You never like to see increased regulation, increased taxes, restrained movement. That all seems to be the status quo.”
$WYNN closed down 1.28%. Melco Resorts and Entertainment Limited ($MLCO) is down 0.10% after hours.