Macau Tightens Chinese Visitor Stays in Visa-Abuse Crackdown

Photographer: Brent Lewin/Bloomberg

Tourists take photographs in front of the Ruins of St. Paul's Cathedral in Macau, China. Close

Tourists take photographs in front of the Ruins of St. Paul's Cathedral in Macau, China.

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Photographer: Brent Lewin/Bloomberg

Tourists take photographs in front of the Ruins of St. Paul's Cathedral in Macau, China.

Macau will reduce the maximum number of days that Chinese passport holders with transit visas can stay in the city to five from seven, in an attempt to prevent them from abusing the law. Casino shares dropped.

Transit visitors from China who don’t depart for another destination within the five days will be in violation of the new rules, effective July 1, and will be penalized upon their next visit, the city’s Public Security Police Force said in a statement yesterday. Repeat violations will result in denial of entry, according to the statement.

Chinese tourists have been driving the revenue of casino companies in the world’s largest gambling hub, including Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) They are competing for gamblers by adding malls, theaters and restaurants at their resorts. An improved rail connection and an increase in hotel rooms are helping draw more vacationing Chinese to Macau and the country’s only legal casinos.

“We do not think this new policy will have a measurable impact on gaming revenue,” Grant Govertsen at investment bank Union Gaming Group said today. “It is important to keep in mind that most high-value casino customers typically come to Macau about four times per year.” Most visitors to Macau only stay a day or two, he said.

Mainland Chinese tourists accounted for two-thirds of the total visitors to Macau in the first quarter, according to government data. Travelers to the Chinese city stayed for less than two days on average in March.

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MGM China Holdings Ltd. (2282) fell 1.4 percent to close at HK$24 in Hong Kong trading, while Wynn Macau Ltd. dropped 2.4 percent and Melco Crown Entertainment Ltd. declined 2.7 percent. Sands China and SJM Holdings Ltd. (880) dropped 1.4 percent and 1 percent, while Galaxy lost 1 percent. Hong Kong’s benchmark Hang Seng Index fell 0.4 percent.

The regulatory change “aims to prevent Chinese passport holders from using transit as an excuse to stay in Macau, when they actually have not gone to their destination,” the government department said in the statement.

In 2013, 2.08 million mainland Chinese arriving in Macau using a transit visa didn’t go on to a third-party country, representing 11.2 percent of total mainland Chinese visitors for the year, Union Gaming’s Govertsen wrote in a note last month.

Casino operators in Macau are expanding their footprint in the city. Galaxy is spending HK$20 billion ($2.6 billion) on the resort’s second phase in the increasingly popular Cotai area. The project is slated to add as many as 500 gaming tables and 1,300 rooms at JW Marriott and Ritz-Carlton hotels next year.

Macau casino revenue rose 9.3 percent to 32.4 billion patacas ($4.1 billion) last month, according to data on the website of the city’s Gaming Inspection and Coordination Bureau.

To contact the reporters on this story: Billy Chan in Hong Kong at bchan101@bloomberg.net; Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net; Jan Dahinten at jdahinten@bloomberg.net Terje Langeland

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