The three Macau casino operators that have U.S.-listed parent companies could soon become targets of Chinese retaliatory measures amid the ongoing trade war between China and the United States. But it is unlikely that their Macau gaming rights are ultimately at risk – although the process leading to refreshment of such rights might become tortuous due to the commercial conflict between the two countries.
So wrote American gaming law scholar and author Nelson Rose, in a Friday entry in his blog ‘Gaming and the Law’. He is professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau.
Prof. Rose added China could also restrict visits to Macau by mainland Chinese tourists as a “quick and easy” way to hurt U.S. interests in Macau’s gaming industry.
Mainland China is the main source of players to Macau’s casinos. When on previous occasions authorities in mainland China restricted visas to Macau for mainland Chinese, that had a direct and negative impact on the city’s casino gross gaming revenue.
The three Macau operators that are U.S.-majority-owned are Sands China Ltd, Wynn Macau Ltd and MGM China Holdings Ltd. According to some other commentators, the firms could become a hostage to geopolitics when the current six Macau concessions expire in either 2020 or 2022.
Sands China is a subsidiary of Las Vegas Sands Corp, a company headed by Sheldon Adelson. Mr Adelson is identified by several commentators as a supporter of U.S. President Donald Trump.
Wynn Macau Ltd is controlled by U.S.-based Wynn Resorts Ltd. The latter was until recently controlled by Steve Wynn, also on record as a supporter of Mr Trump.
MGM Resorts International is the parent firm of MGM China.
“I do not believe the Macau government would refuse to renew the American casino companies’ concessions,” Prof. Rose wrote in his blog.
He added: “Wynn, Adelson and MGM have spent billions building not just casinos but integrated resorts [in Macau]. No Western company would ever spend another cent in China if these investments are lost through government action.”
But Prof. Rose warned that Beijing could “force Macau to announce that the [casino] concession rebidding process will be open to all,” adding uncertainty to the process, as a retaliatory measure against trade actions by the Trump administration.
“They could justify this as the government merely trying to get the maximum for bestowing the privilege of running casinos. If they wanted to, they could pretend that this has nothing to do with [President] Trump,” the scholar stated.
Prof. Rose noted that China had been so far surgical in selecting its U.S. targets in the trade war with the Trump administration. “The People’s Republic of China understands that the fight is political, not economic,” he said.
The scholar noted that Macau authorities have “the legal right to do just about anything” with the current casino concessions.
Prof. Rose added: “Changing laws in [mainland China] and Macau can take no more than the flick of a pen. Restrictions on travel visas, limitations on the number of gaming tables, and even the creation of sub-concessions [in Macau] were all done without hearings or approval by a legislature, let alone the vote of the people.”
Prof. Rose noted that several international gaming operators could be interested in bidding for a Macau casino licence, including U.S.-based Caesars Entertainment Corp and Malaysia’s Genting Group. “If the concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos,” he added.
Jan 15, 2021Recent advisory notices issued by a number of local authorities in mainland China, calling on residents not to travel during the February Chinese New Year (CNY) break, further clouds the prospects...
Jan 15, 2021
“We expect Las Vegas Sands to not have any material change in strategy. The focus remains developing Macau and Singapore”
Vitaly Umansky, Kelsey Zhu and Tianjiao Yu
Analysts at brokerage Sanford C. Bernstein