Tariffs Not Yet Pinching Macau Casino Activity

Posted on: April 14, 2025, 05:25h. 

Last updated on: April 14, 2025, 05:25h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Macau betting volumes sturdy amid US/China trade war.
  • Large bettors continue visiting Macau casinos.

With the US and China — the world’s two largest economies — lobbing trade barbs at each other on a seemingly daily basis, it’d be reasonable to expect that betting volumes in Macau are declining. That’s not the case.

Macau casino revenue China
The US/China trade war isn’t yet weighing on wagering activity at Macau casinos, according to Citigroup. (Image: Getty)

New research from Citigroup analysts George Choi and Timothy Chau indicates wagering activity in the first two weeks of April in the casino hub has largely been flat on a year-over-year basis, indicating tariff controversies have yet to keep bettors away from the special administrative region (SAR).

Despite the ongoing Sino-U.S. trade war — which brings concerns about a reduction in gaming appetite — premium mass wager observed still amounted to $1.43 million, which is surprisingly flat year-on-year,” observe the analysts.

When President Trump ratcheted up trade pressure on China, some analysts speculated that Macau operators with considerable leverage to mass and premium mass clients, which are often more economically sensitive, could be vulnerable to macroeconomic headwinds while big spenders were less likely to alter gaming expenditures.

Speaking of Macau Whale Activity…

Indicating that they’re living up to their ballyhooed status, big bettors continue visiting Macau and there’s no evidence that they’re altering their wagering habits against the backdrop of a US/China trade war.

“Whales were still actively spotted, and they on average wagered 2 percent higher year-on-year,” add the Citi analysts.

That could be a positive catalyst for concessionaires such as Melco Resorts & Entertainment (NASDAQ: MLCO) and Wynn Resorts (NASDAQ: WYNN), both of which lean more into VIPs than do other Macau operators. Shares of those concessionaires along with those of rivals have scuffled this year, Macau casino stocks, including Wynn, are widely viewed as inexpensive.

In a report out earlier today, Bank of America noted that’s true of Melco, which the bank estimates trades at 8.4X projected 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) and 4.7X cash earnings – both below the stock’s long-term averages. However, the bank also pointed out that while Melco performed admirably in the first quarter in terms of EBITDA and gross gaming revenue (GGR), near-term growth could be constrained.

Of note to investors mulling Las Vegas Sands (NYSE: LVS), MGM China parent MGM Resorts International (NYSE: MGM), and Wynn, the Citi analysts point out that the US/China trade spat isn’t encouraging more patriotism among Chinese bettors nor is it encouraging them to avoid Macau casinos operated by US-based firms. That trio of US companies combine for 60% of activity in the Macau premium mass segment.

Pawn Shop Restrictions Aren’t Hurting

In another potential positive for Macau concessionaires, the Citi analysts see little evidence of newly enforced restrictions on local pawnshops as hindering bettors’ ability to access cash for use at casinos.

“The fact that these wagers happened in front of our eyes suggests that concerns about the Macau police’s recent intensified crackdown on pawn shops that conduct illegal cash exchanges may be overdone as players are still able to get cash to the gaming tables,” observe Choi and Chau.