MGM Applauds Commerce Secretary’s China Visit
Posted on: August 27, 2023, 09:57h.
Last updated on: August 28, 2023, 12:36h.
U.S. Commerce Secretary Gina Raimondo is kicking off a four-day trip to China to discuss trade and tourism with officials in the world’s second-largest economy. MGM Resorts International (NYSE: MGM) lauded the move.
MGM controls about 56% of MGM China, which runs two Macau integrated resorts, MGM Cotai and MGM Macau. The Las Vegas-based operator recently forecast it could spend up to $150 million this year enhancing its two Macau venues. That’s part of broader expenditures required by Macau law due to the recently renewed concessions.
MGM Resorts welcomes US Commerce Secretary Gina Raimondo’s trip to China and continues to encourage meaningful and productive dialogue between the United States and China on areas of mutual importance,” said CEO Bill Hornbuckle in a statement. “Travel and tourism remains a critical means by which to foster bilateral cultural exchange and understanding, and we are pleased that Secretary Raimondo is meeting with her Chinese counterparts to find common ground on these and other issues key to the US– China relationship.”
Raimondo is a former governor of Rhode Island. President Biden appointed the Democrat to lead the Commerce Department in early 2021.
US Gaming Industry’s China Ties Run Deep
Three of the six Macau concessionaires are Las Vegas-based operators: MGM, Las Vegas Sands (NYSE: LVS), and Wynn Resorts (NASDAQ: WYNN). Those companies run nine casino hotels in the Special Administrative Region (SAR).
In the case of MGM and Wynn, those firms also have significant footprints on the Las Vegas Strip and benefit from Chinese tourism to the largest domestic casino hub. While China relaxed punitive COVID-19 protocols earlier this year, tourists from the country have yet to return to Sin City in earnest. That could also result from increasingly tense relations between the world’s two largest economies, something that’s likely on Raimondo’s radar.
“While in the PRC, Secretary Raimondo looks forward to constructive discussions on issues relating to the U.S.-China commercial relationship, challenges faced by U.S. businesses, and areas for potential cooperation,” according to a statement issued by the Commerce Department.
President Biden visited China last November. That trip was followed by Secretary of State Anthony Blinken and Treasury Secretary Janet Yellen making their way to China earlier this year.
Gaming Industry Prefers Sanguine China Relations
Through the first six months of 2022, Macau generated more gross gaming revenue (GGR) than Las Vegas and the state of Nevada, enabling the former to regain its crown as the world’s top casino center.
That’s a reminder that Las Vegas Sands, MGM, and Wynn prefer more docile geopolitical relations between the U.S. and China.
Wynn and Sands are two of the most China-dependent nontech companies based in the U.S.. In years past, some gaming industry executives have cautioned politicians about the risks of bellicose rhetoric aimed at China.
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