Macau casino stocks Las Vegas Sands (LVS), MGM Resorts International (MGM), Wynn Resorts (WYNN) and Melco Resorts & Entertainment (MLCO) were tripped up Monday after the global gaming hub's government said it would take new measures to track ATM withdrawals in attempt to halt money laundering and stem the movement of cash out of mainland China.
MGM Resorts slid 1.8% to 30.30 in morning trade. MGM is now just below a 30.72 buy point after hovering just above that entry on April 27. Las Vegas Sands retreated 2.8% to 57.08. Sands has formed a handle in a cup base with a 59.95 buy point, but is retreating toward its 50-day line. Wynn Resorts (WYNN) dipped 1.2% to 120.64.
Melco Resorts & Entertainment fell 4.6% to 21.32 in the stock market today, also hit by news of a secondary stock offering.
Macau, a special administrative region of China and the only part of the nation where gambling is legal, said it will require facial recognition technology at its ATMs. The rules will affect people who have China's UnionPay cards.
It was unclear when the rules would be implemented. But they follow other attempts by authorities to crack down on middlemen who shuffle cash to people coming into Macau from China, as well as many mainland residents' attempts to use a variety of accounts to bypass limits on withdrawals, Reuters noted. The flow of money out of mainland China has weakened the yuan.
JPMorgan said the new ATM security technology was unlikely to do much damage to demand, but will "likely remind many investors of how vulnerable the sector is to regulatory issues," according to Bloomberg.
The restrictions also follow a round of solid earnings for the casino operators. Melco last week reported first-quarter results that beat estimates, helped by a monthslong rebound in gaming revenue in Macau.
MGM in April topped estimates on the top and bottom line, while Sands beat on EPS and matched estimates on sales. Wynn's results also came in above expectations. Melco, which is domiciled in Hong Kong, also beat views.
Macau's government recently reported strong April gaming revenue.