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Wynn Macau Ltd. led declines in Macau gaming stocks after an analyst’s report alleged that a junket group operating out of the company’s casino in the city may have lost as much as HK$2 billion ($258 million) to thievery, adding to concerns over the battered industry.

Wynn Macau, controlled by billionaire Steve Wynn, dropped 3.6 percent to HK$10.86 at the close of trading in Hong Kong, after its parent Las Vegas-based Wynn Resorts Ltd. fell 4.6 percent in New York. The group gets almost 70 percent of its revenue from the Macau unit.

The amount stolen from Dore Holdings, which acts as a middleman for high rollers, could range from HK$200 million to HK$2 billion, according to a report by Daiwa Capital Markets analysts led by Jamie Soo. A Dore employee at Wynn casino declined to comment.

Macau is facing the worst downturn in its history as China’s anti-corruption crackdown and the country’s slowing economy kept away high rollers, who bring in a majority of casino revenue in the world’s biggest gambling market. The alleged theft, if it proves true, could crimp liquidity among junkets and accelerate closures of exclusive gambling rooms operated by these middleman.

“The balance in this instance, even at the low end, is material and quite significant,” Soo wrote. “Our on-the-ground checks point to the possibility that other junket operators may share some of Dore’s existing stakeholders which may exacerbate this contagion impact.”

Liquidity Squeeze

The latest development echoes an incident a year ago when more than $1 billion was allegedly stolen from another junket operator. That prompted investors to withdraw their money from the industry, reducing the amount junkets could lend to gamblers. The industry hasn’t recovered from this liquidity squeeze, Daiwa said in its note Thursday.

Junket operators are independent from casinos, supplying high rollers with credit. The casinos provide dealers and chips in private rooms where the junket operators take their clients.

“Dore owes no money to the company and continues to operate in Wynn Macau,” Wynn spokesman Michael Weaver said in an email. The concerns over Dore “have no direct financial impact on Wynn Macau,” he said.

Minimal Impact

Grant Govertsen, an analyst at Union Gaming Group, doesn’t expect the incident to have a "measurable negative” impact on Macau, which has seen casino revenue fall 15 straight months.

“What Macau is facing is not a liquidity problem but a demand problem,” Govertsen said. “If this was late 2013 then we might want to worry about liquidity being removed from the system that could otherwise fulfill pent-up demand,” he said, referring to the boom period of the industry.

The impact of Dore is minimal as the company accounts for about 3 percent to 4 percent of junket volumes, said DS Kim, an analyst at JPMorgan Chase & Co.

MGM China Holdings Ltd. and SJM Holdings Ltd. fell more than 2 percent, while Sands China Ltd. lost 1.5 percent and Galaxy Entertainment Group Ltd. was unchanged.

(Updates share prices in second paragraph.)