Illegal World Cup Betting Slams Macau Casino Stocks

World Cup fever has taken a toll on businesses from Macau to London. According to Macau's Gaming Inspection and Coordination Bureau, the soccer games in South Africa have had the side effect of stripping 20% from Macau casino revenues in June compared with figures for May, reports AFP.

Although gambling is illegal in China, it's extremely popular and takes place everywhere, from mahjong parlors where elderly folk play for money, to back alleys where men bet on cards. In Hong Kong, betting is legal through the Hong Kong Jockey Club, and the horse races are part of the social fabric.

But the World Cup has proven to be an enormous temptation. Earlier this month, 70 people from a single gambling ring were arrested in China. The group had taken more than HK$100 million ($12 million) in bets on World Cup games, reported Reuters. In Hong Kong, another bust netted a group of seven bookies in possession of betting slips worth HK$65 million ($8.3 million).

With all this gambling available closer to home, the need for Mainland punters to make the trip to Macau, an island just an hour's ferry ride from Hong Kong where gambling is legal, seems less necessary. On Friday, shares in casino operators slumped. SJM Holdings plunged 6.7%, Galaxy Entertainment tumbled 6.8% and Sands China, owned by billionaire Sheldon Adelson, slumped 4.4%. Steve Wynn's Wynn Macau lost 3%.

China's Big Exporters Dip

In Asia Friday, Hong Kong's Hang Seng Index fell 1.1% to end the day at 19,905. Japan's Nikkei 225 Index rose 0.1% to 9,204 and China's Shanghai Composite Index inched up 0.4% to 2,383.

With China's manufacturing rate heading south, the companies that ship Chinese goods out to the rest of the world took a tumble. China Cosco dropped 2.7%, Cosco Pacific declined 2.6% and China Shipping Container Lines was down 2.5%.

Foxconn, the world's largest maker of cell phones, sank another 4.9% in a stock slide that began earlier this week after announcements that its losses for the first half of the year will be higher than expected. Analysts at Goldman Sachs, JPMorgan and Citigroup have cut their share price estimates for Foxconn, compounding the woes of the company, whose recent problems began with a string of worker suicides at its Shenzhen plant.

Chinese property shares rose. Gemdale surged 4.6%, Poly Real Estate surged 3.9% and China Vanke got a 3.7% boost. Beijing Capital Development surged 10% after predicting that its income for the first half of the year may be as much as 150% higher than last year, according to Capital Vue.

Chinese pharmaceutical shares continued to decline Friday on worries that a government commission plans to examine the pricing of drugs. There have been worrying reports of patients paying many times the recommended retail price for drugs prescribed by doctors. On Friday, Jiangsu Yuyue Medical Equipment fell 5.3%, compounding Thursday's 5% plunge; Huadong Medicine dove 5.2% and China National Medicines, which makes both Eastern and Western remedies, dropped 3.9%.

In Japan, Toshiba racked up a 3.4% gain. According to Bloomberg, the electronics company is now working with Mitsubishi Motors to create batteries for electric cars. But Yuasa, which has been working with Mitsubishi on a similar project, tumbled 3.3% on the news. With incentives for electric cars on the rise in cities and nations around the world, competition for contracts to make the batteries that power them will only become more fierce.