The revived U.S.-China trade war is already causing headaches for companies like Boeing that now face the prospect of being shut out of the world’s second-largest economy.
But U.S. casino operator Las Vegas Sands is betting that worsening relations between Washington and Beijing won’t threaten its operations in the Chinese gambling hub of Macau.
“I think we have an incredible relationship with Beijing, and we’ve worked on it for many, many years,” said CEO Rob Goldstein on a call with analysts after the company reported its first-quarter earnings.
“We’re a big believer in the relationship between China and the U.S. We’re very disheartened [by] what’s happening right now. Hopefully, we can get back on track, but it doesn’t keep me up at night,” he added, responding to a question about whether geopolitical uncertainty was on his mind.
In recent weeks, analysts have speculated whether an escalating U.S.-China trade war could put resorts in Macau at risk. In addition to Las Vegas Sands, which operates resorts like the Venetian and the Londoner through its Sands China subsidiary, fellow U.S. casino operators MGM Resorts International and Wynn Resorts also have properties in the Chinese city.
Las Vegas Sands, No. 387 on the Fortune 500, is one of a handful of companies on the famous ranking that makes almost all of its revenue outside the U.S. The casino has five resorts in Macau and one in Singapore.
The company reported net revenue of $2.86 billion for the quarter ended March 31, down 3.4% from the same period a year earlier. Net income also fell 30% to reach $408 million.
The dip was partly driven by softness in Las Vegas Sands’ Macau operations, where visitor numbers have yet to match pre–COVID 2019 levels. The company has pointed to redevelopment at its Londoner resort for softer Macau revenues.
Chief operating officer Patrick Dumont noted on the recent earnings call that all of the Londoner’s 2,405 rooms and suites are now operational, ahead of China’s Labor Day Golden Week holiday that starts May 1.
The company’s Marina Bay Sands resort in Singapore continued to post strong performance. Revenue for Singapore rose to $1.16 billion, growing from $1.15 billion the same period a year ago.
Las Vegas Sands in fact reported greater earnings before interest, taxes, depreciation, and amortization from its Singapore business, compared with its Macau business.
Goldstein was optimistic that the Singapore business would maintain its performance, particularly as the country’s government hopes to draw more visitors.
“It’s very special who goes to Singapore,” Goldstein said. “I think it’s driven because of the overall goal of the government of Singapore, which is to create opportunity for high-value tourism.”
Shares of both Las Vegas Sands and its subsidiary, Sands China, are both down over 30% for the year so far.
