Wynn Resorts CEO Matt Maddox told the AGA that improving the tense relations between the US and China could benefit Macau’s casino operators.
Softening the US-China Relationship is Crucial
The tense relationship between the United States and China could improve under the Biden administration, according to Matt Maddox, Wynn Resorts CEO. Better relations would benefit Macau‘s three US casino operators, Wynn Resorts, Las Vegas Sands, and MGM Resorts International.
In an interview with American Gaming Association (AGA) CEO Bill Miller last week as part of the AGA’s Cards on the Table series, Mr. Maddox declared that “world peace and stability are 100% reliant on a functioning US-China relationship.”
As China rapidly expands globally, Wynn’s CEO stated that the operator must be competitive “in a functional way.” In August, Wynn Resorts declared that tensions between the US and China could lead to “contentious punitive or retaliatory measures being imposed on businesses and individuals,” via a regulatory filing with the US Securities and Exchange Commission and the Hong Kong Stock Exchange. The operator was the first US gaming company to speak openly about the strained relations between the two nations.
Mr. Maddox said he hopes the Biden Administration acknowledges that it is crucial to have good relations between the US and China.
“Both sides hold their grounds on what’s important to them, no one needs to capitulate. We need to recognize where the common goals are and work toward achieving them.”
Matt Maddox, Wynn Resorts CEO.
Macau Might Renew Gaming Licenses Beyond 2022, Analyst Says
Wynn operates three gaming resorts in the region, which includes Wynn Macau, Encore Macau, and Wynn Palace on the Cotai Strip. The operator has announced plans to develop the Crystal Pavilion, a non-gaming entertainment and hospitality complex neighboring Wynn Palace. The project will start in 2021, for about $2 billion.
Macau’s gambling industry and its actors saw their revenue drop considerably this year due to the Covid-19 pandemic. The local gaming market suffered from the cancellation of all activities related to the Chinese New Year last January. Since the beginning of the pandemic, Macau’s gaming market has declined by 80.5% overall. Furthermore, the local gaming regulators are expected to renew gaming licenses over the next year, as the six concessions will expire in June 2022, but the local authorities have remained quiet on the matter.
According to Macquarie Securities gaming analyst Edward Engel’s declarations last week, the Macau authorities’ attention is on the pandemic and the economic recovery. Therefore, current gaming licenses could be extended by more than two years.
“If policymakers are averse to a messy and drawn-out ownership battle, then gaming licenses will need to be renewed at generally favorable terms. In fact, regulators’ intentions to re-tender licenses in just six months gives us more conviction that policymakers intend to maintain the status quo,” Mr. Engel stated.