GGRAsia – MGM China CEO downplays U.S.-China trade war jitters

MGM China CEO downplays U.S.-China trade war jitters

May 15, 2019 Newsdesk Latest News, Macau, Top of the deck

Grant Bowie, chief executive of Macau casino operator MGM China Holdings Ltd, says he does not expect any negative effect on the Macau gaming market from the United States-China trade war.

Investors have been trying to adjust to the escalation of trade tension between the world’s two largest economies, and to assess its impact on the global economy, on corporate profits and on consumer spending.

Investment analysts covering the Macau gaming sector have suggested that the U.S.-China trade spat has at times negatively affected investor sentiment and created turbulent trading conditions for equities of Macau casino operators. But Union Gaming Group LLC recently noted that “has not yet materially impacted fundamentals”.

Brokerages however have mentioned the possibility that the trade war could take a toll on Chinese consumer confidence and on investment in China from U.S.-based operators.

Speaking to reporters on Tuesday, Mr Bowie (pictured in a file photo) said he was not expecting casino gross gaming revenue (GGR) in Macau to be negatively impacted by the trade tension between the U.S. and China.

“I’ve lived in Macau for so many years now, I’m always confident. There are always ups and downs in the marketplace, but we are very strong in Macau,” said Mr Bowie, as quoted by the English-language service of Macau public broadcaster TDM. MGM China is the Macau operating unit of U.S.-based casino developer MGM Resorts International.

He added: “We are still the largest gaming market in the world … but we also need to make sure that we continue to enhance our services, so that we continue to attract customers.”

The International Monetary Fund (IMF) said in a recent report that the Macau economy was particularly vulnerable to economic, financial and policy developments in mainland China. The report gave a warning that any worsening of the trade row between the United States and China might harm Macau by reducing the inflow of visitors from the mainland and by potentially reducing investment in the city by the three U.S. operators of casinos there.

The Macau market recorded a slight decline of 0.5 percent year-on-year in first-quarter GGR – to a tally of MOP76.15 billion (US$9.4 billion), as revealed in data issued on April 1. The Macau decline was led by a 13.4 percent fall in VIP GGR.