Given that the US and China—the two largest economies globally—are exchanging trade criticisms almost every day, it would be sensible to anticipate a decline in betting volumes in Macau. That is not true.
Recent analysis by Citigroup experts George Choi and Timothy Chau shows that gambling activity in the casino center during the initial fortnight of April has mostly remained unchanged compared to the previous year, suggesting that tariff disputes have not deterred bettors 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.
As President Trump intensified trade pressure on China, certain analysts suggested that Macau operators with significant influence over mass and premium mass clientele, who are often more affected by economic changes, might face risks from macroeconomic challenges, while high rollers were less inclined to change their gaming spending.
Suggesting that they’re fulfilling their much-publicized reputation, high-stakes gamblers keep coming to Macau and there’s no proof that they’re changing their betting patterns amid the ongoing US/China trade conflict.
“Whales continued to be actively observed, and they, on average, bet 2 percent more year over year,” the Citi analysts mentioned.
This could serve as a beneficial incentive for concessionaires like Melco Resorts & Entertainment (NASDAQ: MLCO) and Wynn Resorts (NASDAQ: WYNN), as both focus more on VIPs compared to other operators in Macau. Stocks of those concessionaires, along with competitors, have struggled this year; Macau casino shares, such as Wynn, are generally perceived as undervalued.
In a report released earlier today, Bank of America highlighted that this applies to Melco, which the bank approximates is valued at 8.4X anticipated 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) and 4.7X cash earnings – both figures falling short of the stock’s historical averages. Nonetheless, the bank noted that although Melco excelled in the first quarter regarding EBITDA and gross gaming revenue (GGR), short-term growth may be limited.
Investors considering Las Vegas Sands (NYSE: LVS), MGM Resorts International (NYSE: MGM), the parent company of MGM China, and Wynn should take note that Citi analysts indicate the US/China trade conflict is not fostering increased patriotism among Chinese gamblers or prompting them to steer clear of Macau casinos run by American firms. That trio of American companies accounts for 60% of the activity in the Macau premium mass sector.
In another possible advantage for Macau concessionaires, the Citi analysts find minimal signs that newly implemented restrictions on local pawnshops are obstructing bettors’ access to cash for use in 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.
