US gaming operators not expected to lose licenses due to trade war – Brokerage

Macau (MNA) – Analysts from Sanford C. Bernstein believed that the scenario where one or more US casino operators, such as Wynn Macau, Sands China, and MGM China, would lose their gaming concession due to the US-China trade war is ‘remote’ unless the relationship between the two countries sours significantly further into a cold war environment.

In addition, the brokerage believes that all of the six existing gaming operators could see their licenses renewed but with some additional terms.

In theory, as the land concessions and gaming concessions are separated in Macau, if the casino operators lose their gaming licenses, the gaming equipment and actual gaming floors would revert to the government while the original operators would retain legal ownership over the real estate and all the non-gaming and support elements in each property.

Bernstein believed that this kind of scenario would be an ‘operating nightmare’ in practice and thus supposed that the real estate owners have significant leverage over any new concessionaire.

“If the concession was lost and there needed to be a new relationship between the property owner and the new concessionaire. What would be the economic relationship between the two parties?” the brokerage stated.