Wynn Resorts (NASDAQ:WYNN) stock and Las Vegas Sands (NYSE:LVS) stock are both declining 8% in early morning trading. Casino stocks are slumping after new Covid-19 restrictions were imposed in the Chinese region of Macau. Although Wynn and Las Vegas Sands are based in the U.S., they both own multiple casinos in Macau.
New Restrictions in Macau and Elsewhere
After the new coronavirus cases in Macau surged over the last several weeks, Chinese authorities closed all of the casinos in the region. On July 9, officials reported that the casinos would be shuttered for at least a week. This is the first time that Beijing has closed the region’s casinos since 2020.
China has also launched other new, anti-coronavirus measures, including, according to the Financial Times: “a mandate for testing more than 6mn residents in the southern Chinese city of Guangzhou and orders for further compulsory testing by authorities in Shanghai.”
Wynn Resorts and Las Vegas Sands’ Presence in Macau
Wynn owns two casinos in Macau. Before the pandemic, the two establishments were the company’s most profitable resorts. Moreover, in 2019 “Macau accounted for 70% of Wynn’s business.”
Las Vegas Sands owns seven casinos in Macau. According to Barron’s, it obtains “a little over two-thirds of its business from Macau, with the remainder coming from its Marina Bay Sands property in Singapore.”
Two Bullish Takes on Casino Stocks
On July 1, Barron’s predicted that Las Vegas Sands’ bottom line could jump after the restrictions in Macau are rolled back. Barrow Hanley Global Investors believed that those who bought LVS stock were paying almost nothing for the company’s Macau assets, Barron’s stated.
On July 7, Zacks predicted that WYNN stock would probably be boosted by “sports-betting expansion, non-gaming revenue-boosting strategies and [its] expansion efforts.” The firm, however, conceded that the weaker trends in Macau were still worrisome for Wynn and its shares.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.