The boss of casino group Las Vegas Sands Corp has played down the idea of geopolitical risk to the group’s Macau business in the wake of the U.S.-China tariff row.
Robert Goldstein (pictured in a file photo), chairman and chief executive, stated, referring to the firm’s Macau business, Sands China Ltd: “We are not in mainland China, we are in Macau. I think there is a difference. Number one, I do think Macau is a different orientation vis-a-vis Beijing.”
Mr Goldstein was speaking on the parent group’s first-quarter earnings call on Wednesday, in response to a question from an analyst regarding geopolitical risk for Las Vegas Sands’ Macau investments, given strained U.S.-China relations.
Fitch Ratings Inc said in a Thursday note that trade tensions between the U.S. and China had “raised concerns that U.S. gaming operators could be subject to retaliation, while the weaker economic outlook in China is likely to pressure gaming revenues and earnings in Macau”.
The International Monetary Fund (IMF) has halved its forecast for Macau’s economic growth in 2025, according to its World Economic Outlook report published on Tuesday.
The institution now expects Macau’s gross domestic product (GDP) to expand by 3.6 percent this year, down from a previous estimate of 7.3 percent made in October.
The first quarter of 2025 coincided with a 32.0 percent year-on-year dip in the net income of Las Vegas Sands’ Macau operating unit.
Earlier this month, U.S. President Donald Trump raised to a minimum of 145 percent the U.S. tariff on imports from China. Beijing raised its own tariffs on U.S. goods to 125 percent.
On Tuesday, Mr Trump said U.S. tariffs on Chinese imports would come down “substantially” from the current rate of 145 percent, but did not mention a figure.
Fitch observed in its Thursday memo: “Although rising trade tensions have increased concerns over potential retaliation, there are currently no indications that China has targeted U.S. casino companies that operate in Macau.”
The institution added, referring also to the parent businesses of Wynn Macau Ltd and MGM China Holdings Ltd: “The gaming industry contributes around 80 percent of Macau’s tax revenues, and the three U.S.-owned operators represent more than half of gross gaming revenues in the market.”
Fitch noted: “The U.S. operators have also pledged material investments over the next 10 years to develop non-gaming attractions in Macau.”
“Termination or non-renewal of these operators’ Macau gaming licences in 2032 would be a worst-case scenario, which Fitch views as highly unlikely.
“A scenario where U.S. operators are compelled to sell their Macau operations could become more plausible if U.S.-China relations deteriorate further in the medium term, but that is not envisaged in the forecast horizon.”
‘Not concerned’
For his part, Las Vegas Sands’ Mr Goldstein had sought to calm concerns.
He noted on Wednesday’s call: “I think the Chinese are been incredible partners, the government in Macau, people in Beijing, we’re grateful for their support over the years.”
He added: “We do believe we’ll be there for many years to come beyond the concession.”
The chairman stated: “I think we have an incredible relationship with Beijing and we’ve worked on it for many, many years, and it’s very important to us.”
Mr Goldstein added, referring secondly to the U.S.-China trade row: “We’re a big believer in the relationship between China and the U.S.
“We’re very disheartened to what’s happening right now. Hopefully, we can get back on track.”
He further noted: “But it doesn’t keep me up at night at all. In fact, I think we’re in a very good position in Macau.”
The chairman said the group has “been the leader in capex [capital expenditure]” and in developing non-gaming assets in Macau. “We’re not concerned at all about our position in Macau, nor should we be,” he stated.
CBRE Equity Research said in a Monday note that concerns over potential political risks to U.S. operators in Macau “appear overblown,” as the city’s casino resorts are “critical to the region’s economy”.
