Here's Why Casino Stocks Tumbled On A Trial In Macau
Casino stocks MGM Resorts International (MGM), Las Vegas Sands (LVS), and Wynn Resorts (WYNN) fell Friday after a top prosecutor in Macau was found guilty of corruption as the Chinese government continues its crackdown in the gambling district.
XAutoplay: On | OffHo Chio Meng was sentenced to 21 years in jail after he was found guilty for illegally awarding nearly 2,000 public contracts that benefited Ho and his family.
MGM shares fell 1.5% to 31.46 shortly after the opening bell on the stock market today, falling below their 50-day moving average but still in buy range. MGM is less exposed to Macau than Las Vegas Sands and Wynn Resorts, but will open a new casino resort there later this year.
Las Vegas Sands sank 2.6% to 60.56, tumbling below its 50-day line. Shares briefly undercut a 59.95 buy point.
Wynn Resorts tumbled 3.7% to 130.02, gapping below its 50-day line.
Melco Resorts (MLCO) retreated 3.8% to 20.83, falling intraday to their lowest levels since late April.
MGM and Las Vegas Sands closed Thursday in buy range just above their 50-day moving averages.
Crackdowns in Macau started in 2014 after President Xi Jinping vowed to clean up the former Portuguese colony, the only place where gambling is legal in China.
In May, the Gaming Inspection and Coordination Bureau (DICJ), is increasing its audits of the junket industry, over worries of money laundering. Junkets are middlemen bring high rollers to casinos with offers of credit and later settle any debts. The industry accounts for 53% of total casino revenue.
Earlier, officials tried to limit ATM withdrawals in attempt to stop money laundering.