Posted on: May 13, 2024, 10:30h.
Last updated on: May 13, 2024, 10:48h.
Shares of Macau casino stocks are up during early trading on Monday after China announced the inclusion of eight additional cities to its Individual Visit Scheme (IVS) program.
The State Council of the People’s Republic of China announced on Saturday that eight more cities qualify for IVS, which allows individuals on the mainland to easily travel to Macau and Hong Kong. IVS excludes the need to apply for business visas or participate in a group tour to access the two Special Administrative Regions (SARs).
Ho Iat Seng, the chief official in Macau, celebrated the development and said it will bring more visitors to the region, the only place under Chinese control where casinos are allowed.
The Macau SAR Government will endeavor to promote the hosting of more international events, enriching the content of MICE (Meetings, Incentives, Conventions, and Exhibitions), as well as cultural and sports activities, to create a diversified travel experience for visitors,” Ho declared.
Beginning May 27, residents from Taiyuan, Hohhot, Harbin, Lhasa, Lanzhou, Xining, Yinchuan, and Urumqi will be able to participate in the IVS program administered by China’s Exit and Entry Administration.
Shares of the US-traded casino stocks operating in Macau jumped on the IVS news. As of 11 am EST, Las Vegas Sands was up 1%, MGM Resorts was up 1.3%, Wynn Resorts was up 1.5%, and Melco Resorts was up over 4%.
China Continues Supporting Macau
The added cities to the IVS program, gaming analysts say, demonstrate China’s ongoing commitment to supporting Macau. It also reveals there isn’t a strong opposition to casino gaming among Beijing leaders. Casinos accounted for 77% of Macau’s tax revenue last year.
The more near-term impact from the pronouncements should be a boost to sentiment as the policy measures are a clear indication from the Chinese government about its continued support for Macau and no negative association with the gaming industry,” said Seaport Research Partners gaming analyst Vitaly Umansky.
Initiated in 2003 to increase tourism to Macau and Hong Kong, IVS now involves 59 cities under China’s control.
The increase to the eligible cities comes as Hong Kong tries to revive its economy post-COVID, which saw many businesses and expats flee the region amid national lockdowns. Macau is also in a changing economic environment after forcing out most VIP junket groups that had catered to mainland high rollers.
The six casino companies are investing nearly $18 billion in nongaming projects at their casino resorts. The nongaming pledge came in late 2022 in exchange for 10-year extensions of their gaming licenses.
IVS Explained
IVS allows people in the 59 qualifying cities to apply electronically for visas to travel to Macau or Hong Kong.
The travel permits are valid for up to a year and allow a person to travel to the named SAR for up to seven days. There are currently no limitations on the number of IVS endorsements a traveler can receive in a given year.
In January, the Macau SAR Government said it expected 33 million people to visit the casino enclave this year, or about 84% of the city’s 2019 traveler count. With eight more cities qualifying for IVS, that forecast could be raised.