Bo Xilai Killing Macau

Interesting development: Macau stocks got slammed

Wynn Macau fell 5%.
Sands China fell over 4.4%
SJM lost 5.8%.
Why?
There is reportedly a crackdown happening on allegedly corrupt Junket Operators, the companies that bring in high-rollers for the casinos for a fee.
Says FT:

Pang Yufeng and Qin Xi Xin, two individuals who bring high-rollers from the mainland to the VIP rooms in Macau casinos and then collect the gambling debt in return for a commission, were arrested in recent weeks, according to the Wall Street Journal. Reuters also reported that more than half a dozenof these agents were arrested at Wynn Macau’s properties last month, possibly in relation to money laundered by Bo Xilai, the disgraced former Chongqing chief.

Hoffman Ma, deputy chief executive officer of Ponte 16, a Macau casino, said he didn’t believe that any recent arrests would have to do with Xi Jinping being at the helm in Beijing. He said the VIP sector started to slow down half a year ago, which was a sign that a general crackdown against illegal fund flows had begun in Macau.

Macau is seen as something of a tell on China as a whole.
Gaming revenues are a decent proxy for the total economy. A crackdown on doing business may be a sign of a more aggressive move to stamp out corruption.
 Jim Chanoshas made a big point about Macau as essentially functioning as China's big money laundering destination.

A Wikileaks Cable Explained The Money Laundering Formula That Turned Macau Into A Gigantic Economic Success

Shares of Macau-based casinos got slammed in the last day amid reports of the mainland cracking down on the junket operators that ferry rich players into high-roller rooms.

Junket operators are widely believed to be associated with organized crime and money laundering.

So how does it work?

This was actually the subject of a Wikileak that was supposedly sent in 2009 from the American Consulate in Hong Kong. It's about as concise of an explanation for the controversy as you could find:

The casino and hospitality sector now accounts for  well over half of Macau's GDP.  Yet its phenomenal success is based on a formula that facilitates if not encourages money laundering.  Mainland Chinese gamblers account for a large share of the lucrative VIP gaming market, betting literally  billions of dollars despite Chinese government-imposed  capital controls that restrict Chinese residents to taking  just USD 50,000 worth of currency out of China each year.

Success of the VIP market in Macau depends on "junket  operators" who arrange visas, supply local currency financing  and provide access to VIP gaming rooms in Macau casinos.  VIP  gambling accounts for over 60 percent of Macau's casino  revenues.

Although they must register and are subject to  nominal regulation in Macau, these facilitator organizations  allegedly work closely with organized crime groups in  mainland China to identify customers and collect debts.  Junket operators work directly with Macau casinos to buy  gaming chips at discounted rates, allowing players to avoid  identification.

Know-your-customer (KYC) and record-keeping  requirements are significantly looser than in other  international gaming venues.  Government efforts to regulate  junket operators in Macau have been aimed at limiting  competition, rather than combating illicit activities.  Oversight of both casinos and junket operators is limited and  remains a serious weakness in Macau's AML regime.  Periodic  tightening of Chinese Individual Visitor Scheme permit  requirements may reflect Chinese government concern about  corrupt officials laundering money in Macau.