Casino Stocks Gain On Macau News, Japan Legislation & Debt Restructuring Deal
Casino stocks saw gains in Thursday's market on Macau news, Japan's gaming approval, and talks surrounding a debt restructuring deal financing investments in Japan.
Shares of Las Vegas Sands (NYSE: LVS), Melco Crown Entertainment (NASDAQ: MPEL), Wynn Resorts (NASDAQ: WYNN), MGM Resorts (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR) are all trading higher on Thursday.
Francis Tam on Casino POS Machine Ban
The Macau Daily Times reported that Macau's Secretary for Economy and Finance Francis Tam said the "Macau Monetary Authority gave no instructions to remove all point of sale (POS) machines from jewelry and luxury stores located inside or outside casinos, contradicting to previous media reports. Nevertheless, those stores located at casinos will not be allowed to increase the number of POS machines they own, starting from July this year."
Francis Tam emphasized that department has always required casino and gaming companies to enhance methods of monitoring card and cash transactions. He added that the government will review the ban three to four months after the implementation.
Will Melco Crown Take the Lead in the Sector?
Analyst David Bain from Sterne Agee reported that Melco Crown Entertainment remains the firms top pick. Bain noted the company's low valuation with respect to the sector and the opening of City of Dreams in Manila.
Sterne Agee added that Melco is likely to benefit from Japanese legislation on gaming expansion approval and has the "best" location for its casino in Cotai.
Despite recent drawbacks in shares over the past few months, the analyst highlighted the company's long-term potential from growth, increased dividends and buybacks.
Melco Crown shares gained as much as five percent in Thursday's trading session.
Caesars CEO Discusses Debt Deal to Finance $5B Japan Investment
Thursday morning, Reuters reported that Caesars Entertainment could agree to a debt restructuring deal within the year and have no issues with financing in Japan.
CEO Gary Loveman commented that "he believed Caesars' finances - its debt carries a speculative grade rating - would not put it at a disadvantage as it seeks a licence in Japan, where a bill to legalise casinos could be put to a vote in parliament this year."
Loveman added that the attractiveness of a license in Japan would outweigh the hardships of raising money.
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