US Macau Concessionaries Not at High Risk of Revenge Tariffs

Posted on: April 22, 2025, 03:05h. 

Last updated on: April 22, 2025, 03:05h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • The three US-based Macau operators are unlikely to face retaliatory tariffs
  • Data suggest bettors aren’t staying away from casinos run by those companies

The three US-based Macau casino operators are among the companies caught in the crossfire of another US/China trade war, but those concessionaries aren’t at high risk of levies implemented directly against them by Beijing.

Macau casino revenue gaming GGR
Downtown Macau is seen with Grand Lisboa and Wynn Macau casino resorts. A research firm says tariff risks are overstated for Macau casino stocks. (Image: Bloomberg)

That’s the take of CBRE Equity Research analysts John DeCree and Max Marsh who in a recent report state trade controversy isn’t to be taken lightly, but related concerns may be exaggerated. Units of Las Vegas Sands (NYSE: LVS), MGM Resorts International (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN) comprise the three Macau operators that are domiciled in the US.

Political risks, such as retaliatory actions against U.S. gaming operators in Macau, are a concern but appear overblown,” wrote the analysts. “Direct actions against operators could destabilize Macau, making such moves unlikely.”

MGM China, Sands China, and Wynn Macau combine to run nine integrated resorts in the special administrative region (SAR). Five of those venues are operated by Sands China, making that company the largest in Macau.

Rough Start to 2025 For US Macau Casino Stocks

Entering this year, Macau gaming equities were battered and out of favor with investors, though the asset class was widely viewed as inexpensive relative to historical norms.

Compelling valuations haven’t been enough to rescue the group as the average year-to-date decline for Las Vegas Sands, MGM, and Wynn is approximately 19.30%. Wynn is the best-performing member of that trio with a 2025 loss of 10.64% while Sands is the worst offender, having shed more than a third of its value since the beginning of the year.

As it relates to gaming equities, investors’ response to the specter of another US/China trade imbroglio is sensible, particularly when it comes to Sands and Wynn. Outside of the technology sector, those are two of the most China-dependent domestic companies based on percentages of earnings and revenue generated from that country.

For that duo and MGM China, there are some green shoots. Recent data indicate the tariff flap isn’t deterring tourists from going to Macau nor is it encouraging them to avoid casinos operated by US companies.

US-Based Macau Casino Operators Hold Some Cards, Too

President Trump’s disdain for China’s trade practices are well-documented and his current rhetoric aimed at Beijing represents a sequel to what was seen during his first term, meaning the US-based Macau operators have been down this road before.

Investors are clearly jittery, but it’s a movie the operators themselves have seen before. Plus, MGM, Sands, and Wynn have some leverage in Macau.

“Macau’s integrated resorts are critical to the region’s economy, contributing over 80 percent of government tax revenue and U.S.-based operators alone employ 14 percent of the workforce,” add the CBRE analysts.

Additionally, it’s not practical to ponder a scenario in which the US-based firms would be banished from Macau because the list of suitable replacements is arguably less than three, implying the Chinese government and gaming regulators in Macau are motivated to avoid a worst-case scenario.