Macau Casino Shares Rise After China Expands Individual Visit Scheme to More Cities
Stocks of Macau casino companies are on the rise during early trading on Monday following news that China will add eight more cities to its Individual Visit Scheme (IVS) program.
The People's Republic of China's State Council formally declared on Saturday that these eight cities would now be included in the IVS, enabling mainland individuals to travel freely to Macau and Hong Kong without needing to apply for business visas or joining a group tour.
Macau's top official, Ho Iat Seng, celebrated this news and stated it would draw even more visitors to the region, the only place under Chinese control where casinos are permitted.
The Macau Special Administrative Region (SAR) government plans to promote hosting more international events, enhancing its Meetings, Incentives, Conventions, and Exhibitions (MICE), as well as cultural and sports activities, to offer visitors a diverse travel experience.
From May 27, residents from Taiyuan, Hohhot, Harbin, Lhasa, Lanzhou, Xining, Yinchuan, and Urumqi can participate in the IVS overseen by China's Exit and Entry Administration.
US-listed casino stocks with operations in Macau saw share prices rise due to the IVS announcement. By 11 am EST, Las Vegas Sands gained 1%, MGM Resorts rose 1.3%, Wynn Resorts climbed 1.5%, and Melco Resorts increased by more than 4%.
Continued Support from China
IVS expansion demonstrates Beijing's continuous support for Macau, according to gaming analysts. This also implies that there is little resistance among Chinese leaders concerning casino gaming. Casino revenue accounted for 77% of Macau's tax income last year.
The immediate impact is likely to be a sentiment boost, according to Seaport Research Partners gaming analyst Vitaly Umansky, who mentioned that the policy measures are a clear sign from the Chinese government about its continued support for Macau and no negative associations with the gaming industry.
Instituted in 2003 to boost tourism to Macau and Hong Kong, IVS now involves 59 cities under Chinese control.
This expansion occurs as Hong Kong works to recover economically after the COVID pandemic triggered mass departures from the region among businesses and expats. Meanwhile, Macau, which previously relied heavily on VIP junket groups catering to mainland high rollers, is now undergoing a period of economic transition.
The six casino firms collectively plan to invest close to $18 billion in non-gaming projects at their casino resorts. This commitment was made in late 2022 in exchange for ten-year extensions of their gaming licenses.
IVS: A Brief Overview
IVS enables inhabitants of the 59 eligible cities to apply online for visas to travel to Macau or Hong Kong.
Visas issued under IVS have a validity period of up to a year and allow a visitor to stay in the designated SAR for up to seven days. Currently, there is no restriction on how many IVS endorsements a traveler can secure within a given year.
In January, the Macau SAR Government projected 33 million people would visit the casino hub in 2023, representing approximately 84% of Macau's 2019 visitor count. With the addition of eight more cities to the IVS program, this projection could be adjusted higher.
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Source: www.casino.org
