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Sector Snap: Casinos With Macau Ties Dip
Message was posted: 03:18 May 27th, 2007

User: Joseph Rank: Casino Gold: 31383CG Contributor rating: 39760 Status: Offline

Sector Snap: Casinos With Macau Ties Dip Associated Press 05.25.07, 3:58 PM ET Shares of Las Vegas Sands Corp. and Wynn Resorts Ltd. dipped Friday on fears travel restrictions could spell trouble for the casino operators' investments in Macau, the "Las Vegas of the East." Macau, a Chinese territory next to the Guangdong province, has exploded into a gambling mecca of sorts in recent years after Las Vegas Sands (nyse: LVS - news - people ) and Wynn built casinos there. But according a local newspaper report, Guangdong has begun to tighten travel restrictions, which could make travel to the region difficult. The government of Guangdong has started to enforce a strict visa application process, put tighter limits on the amount of times residents can travel to Macau and in some cases, is restricting permits altogether. Lehman Brothers (nyse: LEH - news - people ) analyst Felicia Hendrix said it is too early to tell what the effect of this strict policy will be, but the region has yet to see any impact. Morgan Stanley (nyse: MS - news - people ) analyst Celeste Mellet Brown said although the travel restrictions could have a negative impact on Macau gambling, she expects that the region's government will work with Central Chinese officials to minimize the hit. "We will be interested to see how this plays out in the near-term, though we expect any drop in visitation to be offset by the increase in non-gaming amenities and hotel rooms with the opening of (Las Vegas Sands') Venetian in late August," she wrote in a note. Shares of Las Vegas Sands fell $1.41 to $76.38 in afternoon trading, while Wynn fell $1.91, or 2 percent, to $94.79. Most other casino operators declined slightly in afternoon trading. Forbes