Macau Theft Resulting in Huge Stock Declines for Casino Operators
The decline in casino gambling in Macau has been well documented, with over a year of declining monthly revenues experienced by the city's casinos primarily due to a crackdown on corruption by the Chinese government, smoke-free initiatives, and the gradual movement from a VIP market to a mass market model.
There is more bad news for the gaming mecca many refer to as the Las Vegas of Asia, with reports of up to hundreds of millions of dollars being stolen from a gambling junket operating inside the Wynn Macau by one of its senior employees.
As reported on Bloomberg Business, Daiwa Capital Markets analysts led by Jamie Soo issued a report stating that anywhere from HK$200 million ($25.8 million) to HK$2 billion ($258 million) was stolen by employees of Dore Holdings, the junket working inside the casino which acts as a middleman for high rollers.
According to UBS Securities analyst Anthony Wong, Dore operates at least 25 of the VIP tables at the Wynn casino. This represents over five percent of the 461 total tables the casino operates, according to its latest filing.
Dore explained in a statement that a former manager engaged in unauthorized actions which "severely impacted the company's interest and reputation." Dore added that, "Due to the seriousness of this event, which involved fraud, the group has filed a police report."
The reported theft has not only been affecting the Wynn, but also the parent companies of other casino operators in the region as well. Yahoo! Finance reported, "On Wednesday, the sector heavyweights MGM, Wynn Entertainment, Las Vegas Sands, Melco Crown Entertainment, and SJM Holdings were all down between two percent and six percent after trading ended in Hong Kong."
The stock declines are despite the Wynn Macau reporting that the casino did not lose any money. However, since it was money lost at the expense of the casino's high rollers, the most valued customers at most casinos, it could sharply contribute to the steady declines the region's casinos have already been experiencing.
This theft also could have an affect on the gambling junkets, which many high rollers depend upon, since according to Yahoo! Finance, a staggering 16 percent of gambling junkets closed shop in Macau after a bigger theft was reported in April 2014.
According to Business Insider, last year's theft took place when $1.3 billion was stolen from the junket Kimren with some analysts referring to this incident as the Macau's "Lehman Moment."
Daiwa Capital analysts believe that we should expect to see steep declines in Macau due to the more recent heist, along with problems still trickling from last year's theft.
"As a whole, the junket segment never recovered from this liquidity squeeze," Daiwa reported in a note about the theft. "We are already seeing signs of this today, with individuals purportedly rushing to the junket (Dore) in an attempt to withdraw funds."
Image courtesy of Wikipedia.org
Want to stay atop all the latest in the poker world? If so, make sure to get PokerNews updates on your social media outlets. Follow us on Twitter and find us on both Facebook and Google+!
