Macau, the biggest gambling hub in the world, is located just an hour away by ferry from Mainland China. Some of the biggest casino brands in the world like the Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts Ltd have built billion dollar casinos in Macau and have generated a significant portion of their revenue from Macau’s gambling industry.

The last 12 months these gambling establishments have suffered serious losses due to the anti-corruption crackdown imposed on Macau’s casinos. The government also implemented a number of restrictions in 2014 including a smoking ban and cutting down on the number of visas granted to Mainland Chinese tourists. Casino stocks dropped considerably as casinos reported a lack of VIP gamblers who are responsible for generating more than 50% of Macau’s casino revenue.

Macau’s government recently announced changes to its visa policy and relaxed the norms that would now allow Mainland Chinese tourists to stay for a total of 7 days in Macau. The previous visa policy allowed Mainland Chinese to stay for a maximum of 5 days only and allowed them to enter Macau twice every 60 days. The new policy would allow Mainland Chinese to visit Macau twice every 30 days.

The government has decided to amend the visa rules in an effort to encourage Mainland Chinese to once again start visiting Macau’s casinos. The small relaxation on visa rules had a big impact on casino stocks as the market responded positively to Macau’s new visa policy. Las Vegas Sands which is the biggest gambling firm in the world reported a 4.1% increase to $52.17, MGM Resorts reported an increase of 3.3% to $18.23 and Wynn Resorts shares went up by 3.9% to $97.62.

In a statement, Anthony Wong, a UBS Securities analyst said “High-frequency gamblers across segments can now visit twice every 30 days vs. twice every 60 days. This might also suggest that current demand has reached a level the government feels a need to act to support it from falling further.”

Macau’s casinos have been under an intense anti-corruption crackdown during the last 18 months and Mainland Chinese gamblers have been the main focus of the anti-corruption operation. As a result, a significant number of gamblers from Mainland China stopped coming to Macau and casino revenues plummeted. The relaxation in visa norms is the first time in 18 months that the Macau government has done something to favour Macau’s gambling industry and casino operators hope that more friendly gambling policies will be rolled out in the near future.

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