Wynn Resorts has just secured a $1.5 billion credit line from the Bank of China. The financial lifeline comes as casinos that operate in Macao are facing uncertainties as the world's biggest gambling hub attempts to tighten gaming regulations and shift to other sources of revenue.
According to its filing, Wynn Resorts will be able to borrow an additional $1 billion if certain conditions are met. Wynn said that the credit line will be used to refinance some of the company and its subsidiaries' debts. It added that some of the funds will be sued to pay for "ongoing working capital needs" and general corporate purposes.
Earlier in the week, Macao officials said they will be holding a 45-day consultation for possible new restrictions on casino operators. Officials added that they will be appointing government representatives as supervisors to existing companies. The announcement raised fears amongst investors, which resulted in the drop of major casino stocks.
In Hong Kong, Wynn Macao's stocks dropped by more than 29% on Wednesday before dropping a further 4.7% on Thursday. Listed casinos such as Sands China, and MGM China also plummeted on the news. According to estimates, nearly $18.4 billion in market value was wiped out from Macao's top casino stocks in just one day.
Macao officials are currently discussing the possible revisions to existing regulations with the aim of diversifying its economy, which is heavily reliant on gambling revenue. Among the topics that are being discussed is the possible limitation of how many licenses will be issued, how long license terms will be, and the level of involvement the government will have on the casino's operations.
Macao's economic and finance secretary, Lei Wai Nong, said that they are looking at possible reforms in multiple areas, including changes to their licensing evaluation process and employee welfare. He added that they will also be pushing for operators to establish "non-gambling" businesses to attract more international tourists.
Macao, which attracts mostly gamblers from the mainland, has long been attempting to shift its source of income to tourism and other sources. When the pandemic hit, Macao's economy was struggling to keep afloat as casinos and hotels were forced to shut down.
