A government crackdown on illegal money exchanges is depressing gambling volume in Macau. That was one of the conclusions of Jefferies Equity Research analyst David Katz in an investor note released Monday morning.

Katz called this summer’s casino activity in Macau “steady but unspectacular.” In addition to the money-exchange problem, he noted a macroeconomic overhang from China overall.

Both MGM Resorts International and Hong Kong-traded Galaxy Entertainment continued to enjoy Katz’s favor among Macanese casino stocks. As for Wynn Resorts, slated to report second-quarter earnings on Tuesday, “We expect the focus will be the impact on visitation and VIP/Premium Mass players from the recent illegal money exchange clamp-down, especially as we are in the summer holiday period.”

During a recent trip to Macau, Katz wrote, “We noted more than usual police patrolling some properties.” This was pursuant to a July 5 edict against money exchanges, issued by China’s Ministry of Public Security.

Beyond the money-exchanger issue, Wynn is believed to be focusing on maintaining its current market share, as opposed to growing it, which Katz deemed unusual for a Macanese concessionaire. Katz believed the company would emphasize customer-relationship marketing and propelling business toward its legacy properties on the Taipa peninsula.

“The other focus would be its interest in potential new integrated resort opportunities in Thailand, New York, and whether any potential investment would be via group or through its Macau entity, as MGM noted,” Katz wrote. He also anticipated management commentary on Wynn’s in-progress Al-Marjan Island resort in the United Arab Emirates, “including investment levels and recent regulatory progress.”

Katz closed by lauding MGM for its continued execution in Macau. Regarding Wynn and Las Vegas Sands, he mused, a catalyst would be necessary to re-rate them upward “and the current update is not supportive” of such a move.

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