Macau visa clampdown impact seen as limited

    Macau casino stocks took another tumble on Tuesday on news that authorities will cut the maximum number of days Chinese passport holders with transit visas can remain in the city to stop abuse of the system.
    However, analysts said the impact of the changes is likely to be minimum on Macau’s gambling industry, which generated a record $45 billion in revenue last year.
    The number of days permitted under a transit visa has been cut to five from seven and follows a reduction in August 2008 from 14 days to seven. There is concern on the part of authorities that mainland Chinese use the visas to enter Macau, but fail to continue to another destination.
    Transit visitors 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. Those who repeatedly abuse the law will be banned from entry.
    Analysts point out that the average length of a visit to the city’s five-star hotels was just two days in March, a trend that has been consistent for the past three years. When speculation first began circulating of a tightening in visa rules in May, Bank of America/Merrill Lynch said the worst-case scenario would be a reduction in growth of 3 percent to 5 percent.
    Mainland Chinese tourists accounted for two-thirds of the total visitors to Macau in the first quarter.
    Still, it was another excuse to sell stocks, which have already been reeling from a series of negative headlines, including scandals involving junket operators that bring in the high rollers from China and a downgrade in estimates for gross gambling revenue growth this year.
    Melco Crown fell 2.7 percent in Hong Kong trading, while Sands China dropped 1.3 percent, MGM China lost 1.6 percent and SJM Holdings declined 0.9 percent.