U.S.-China Trade War Hits Macau Casino Stocks
Shares in Hong Kong-listed stocks toppled more than 13 percent April 7 as China and the United States escalated their trade war. It was the steepest decline since the 1997 Asian financial crisis, according to Macau Business.
On April 2, U.S. President Donald Trump announced steep tariffs affecting trade partners around the world. China was hit with a 34 percent tariff on imports, in addition to two earlier rounds of 10 percent. In response, Beijing levied a 34 percent tariff on U.S. goods, then raised it to 84 percent. Trump then hiked the China levy to 125 percent.
In the immediate aftermath, Macau casino concessionaires SJM Holdings, Melco International Development and Galaxy Entertainment hit three-year lows, dropping 18 percent, 16 percent and 12.44 percent respectively. Their American counterparts—Sands China, Wynn Macau and MGM China Holdings—lost 14 percent, 13 percent and nearly 12 percent.
Morningstar Investment Research warns of heightened risks for American companies doing business in Macau, but analyst Dan Wasiolek believes casino operators will outlast the turbulence. “While we will continue to monitor the macroeconomic environment … we maintain our view that all six gaming concessions will get renewed and extended beyond the 2032 period,” when the current concessions end, he wrote.
“Our stance is based on China’s desire that Macau be a world destination resort,” he added. That goal demands “the integrated resort expertise” of LVS, MGM and Wynn.
Appeals Court Upholds Billion-Dollar Baha Mar Award
An appeals court in New York has upheld $1.6 billion in damages awarded to Swiss developer Sarkis Izmirlian. In November 2024, the state Supreme Court ruled that Izmirlian, original developer of the Baha Mar resort in Nassau, Bahamas, was defrauded by contractor China Construction America (CCA).
Justice Andrew Borrok found that CCA “knowingly and falsely” promised to meet development deadlines, knowing it could not do so, and also misappropriated funds. He called CCA’s actions an “absolute sham and shakedown” that forced Izmirlian’s BML Properties to file Chapter 11 bankruptcy.
On appeal, CCA—construction manager for Genting’s Resorts World New York—sought reversal of what it called a “deeply flawed decision.” But on April 8, the court found “no basis to disturb the trial court’s award.” The damages continue to accrue due to daily interest and now top $1.7 billion.
Hong Kong conglomerate Chow Tai Fook Enterprises bought Baha Mar in 2017 and continues to operate it.
Inspire Woos Osaka VIPS
Inspire Entertainment Resort in Incheon, South Korea, has opened an office in Osaka, Japan. In a statement, President Chen Si said Inspire is committed “to expanding our business in the Kansai region and improving our services for Japanese customers.”
Until recently, Inspire was controlled by U.S. tribal entity Mohegan Gaming & Entertainment. But in February, lender Bain Capital seized control of the property, which accumulated losses of $104 million in its first year.
Inspire seeks to “deepen relationships with Japanese VIP customers and provide them with a seamless, world-class resort experience,” said Chen. It’s a clear bid to get a jump on MGM Osaka, Japan’s first integrated resort with a casino, which is due to open in 2030.
Russian Casino Zone Sees Increased Visitation
The Primorye gambling zone near Vladivostok welcomed more than 763,000 visitors in 2024, up 17 percent year on year. About 14 percent of tourists came from outside Russia, chiefly Uzbekistan.
The zone is currently home to two casinos: Tigre de Cristal and Shambala. The former, which opened in 2015, was positioned as the first in a cluster of casinos planned for the vicinity. But it stumbled out of the gate and closed during the pandemic. Since then, Russia’s war with Ukraine has undermined visitation. Shambala suffered from bad timing, opening in 2020.
According to the development corporation, 10 tracts are still available in the casino zone.
