Macau casino stocks are falling as the city prepares to crack down on the industry.

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Macau casino stocks are falling as the city prepares to crack down on the industry.

Shares in Macau casino operators plummeted on Wednesday as regulators in the world’s most populous gambling city announced plans to tighten their grip on the already troubled industry.

Sands China and Wynn Macau, both listed in Hong Kong, all lost approximately 25%, while Melco Entertainment, SJM Holdings, MGM China, and Galaxy Entertainment all lost around 17%, wiping billions off their valuations.

The sell-off followed the Macau government’s announcement on Wednesday of a 45-day public consultation, which included a proposal for direct oversight of the casino industry, which has been under increased scrutiny from authorities in recent years.

Officials want to place government representation on the boards of licensed operators to oversee their activities and make clandestine banking illegal in the business.

The decision comes as mainland China’s government tightens its control on the world’s second largest economy by cracking down on a wide variety of businesses, including tech and private education firms.

President Xi Jinping is also waging a campaign aimed at the country’s super-wealthy, pushing for “shared prosperity.”

“The casino difficulties are a continuation of what has been a fairly large crackdown,” said Jason Ader of SpringOwl Asset Management in New York.

“Right now, there’s a discussion about whether China is really investable. Increased regulation, higher taxation, and restricted movement are all things you don’t want to see. That appears to be the status quo,” said Ader, a former member of the Las Vegas Sands board of directors.

The announcement comes as the six licenses allowing firms to operate casinos in Macau — the only area in China where casino gambling is legal – are set to expire in June, and the corporations will have to compete to keep them.

Macau’s casinos typically provide around 80% of government income and more than half of the city’s GDP, with upwards of 82,000 people employed in the industry by the end of last year, accounting for nearly a fifth of the city’s working population.

In a single week, the city earns more than Las Vegas does in a month.

The coronavirus, on the other hand, has wreaked havoc on the industry, with travel restrictions enforced by the government to prevent the sickness from spreading wiping away tourism, which is the casinos’ lifeblood.

Due to China’s anti-graft crackdown, the industry had already been struggling for years.

Despite the fact that the gaming industry is Macau’s financial lifeline, the government has expressed concern about the. Brief News from Washington Newsday.

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