The Gaming stocks plunged suddenly yesterday after China limited the maximum amount of money that Macau visitors can take out of an ATM. Approximately around 2:00 EST, this news hit the market, so the shares of Wynn Resorts fell nearly 11%, Las Vegas Sands dropped almost 12%, and Melco Crown dropped with 13% at the end of trading. MGM Resorts International was spared this pain because it remains Las Vegas focused. However, its shares are down 5.3%.
What does that mean?
The South China Morning Post reported that the country is cutting the maximum amount of cash customers can pull out of their Union Pay cards to $626 per day. This happened after they instituted the annual cap of $13,697 several months ago. The impact of the Union Pay limit will most likely have a massive effect on companies like Melco Crown and Las Vegas Sands. However, it will not likely have a big impact on Macau.
What will happen next?
We will be quite surprised if an ATM limit becomes something that has a massive impact on the $27.8b Macau market. So, if this is a sign that there will be a further crackdown on the capital heading to Macau, there might be huge negative side effects. However, that is highly unlikely.
Macau begins to recover slightly, but there is a concern that the industry might be heading into decline once more. However, we do not think that this speculation will stick around unless China’s currency manipulation exceeds ATM limits.