Casino operators could be forced to exit Macau if US-China tensions deepen, Fitch warns
Fitch Ratings has warned that American gaming operators in Macau are facing increasing pressure from rising geopolitical tensions between the United States and China. As the trade war between the two economic powers deepens, concerns are growing that U.S.-based casino firms could become collateral damage in a prolonged diplomatic and economic standoff.
“Trade tensions between the U.S. and China have raised concerns that U.S. gaming operators could be subject to retaliation,” Fitch said in a statement on Thursday.
The rating agency said that American firms such as Las Vegas Sands, Wynn Resorts, and MGM Resorts International are heavily reliant on their operations in Macau. In 2024, Macau accounted for 63 percent of Las Vegas Sands’ consolidated revenue, 52 percent for Wynn, and 23 percent for MGM. All three companies operate through publicly listed subsidiaries in Hong Kong, adding a layer of operational complexity as well as exposure.
No immediate retaliation, but risks remain
Despite rising tensions, Fitch does not currently see evidence of Chinese authorities targeting U.S. casino firms in Macau. “There are currently no indications that China has targeted U.S. casino companies that operate in Macau,” the agency noted.
Macau’s economic dependence on the gaming sector may be acting as a moderating influence. The city derives around 80 percent of its tax revenues from the casino industry, and U.S. operators generate over half of the total gaming revenues in the market. The American firms have also committed to long-term investments in non-gaming infrastructure as part of their licence obligations.
Last month, the Macau government announced a midterm review of casino operators’ mandated non-gaming investment, as part of an ongoing effort to diversify the city’s economy. The review, announced by Secretary for Economy and Finance Tai Kin Ip on 28 March, will assess how well operators have adhered to their obligations since signing new concession agreements in 2022.
Still, Fitch cautioned that China has a precedent of exerting pressure on foreign firms through regulatory scrutiny in response to political disputes. “Consumer boycotts are also possible, but they tend to be short-lived,” the agency added.
Licence risks and long-term uncertainty
The licences held by the U.S. casino firms are not set to expire until 2032. While Fitch described the worst-case scenario of termination or non-renewal as “highly unlikely,” the possibility of forced divestment could grow if relations between Washington and Beijing deteriorate further.
“A scenario where U.S. operators are compelled to sell their Macau operations could become more plausible if U.S.-China relations deteriorate further in the medium term, but that is not envisaged in the forecast horizon,” said Fitch in its .
Economic outlook in China adds further pressure
In addition to political risks, the economic slowdown in China presents a further challenge to the gaming industry in Macau. According to Fitch, China’s gross domestic product (GDP) growth is expected to slow to 3.9 percent in 2025, a downward revision in response to the intensifying trade conflict.
However, there may be some upside in consumer spending. “We slightly raised consumption growth expectations to 3.3 percent,” Fitch said, noting that potential government stimulus could support discretionary spending, including tourism and gaming. Year-to-date, Macau’s gaming revenues have been flat compared to the previous year, below the low-to-mid-single-digit growth initially forecast for 2025.
Financial strength offers buffer
Despite these challenges, Fitch emphasised that the U.S. operators remain in a stable financial position. Las Vegas Sands, in particular, benefits from a strong balance sheet and positive rating headroom. “Liquidity is abundant, supported by high cash levels and strong projected free cash flow despite dividend payments, share repurchases and capital spending projects,” Fitch reported.
Wynn and MGM also maintain adequate headroom at current rating levels. The structure of their Macau operations, via legally ringfenced subsidiaries, means that any financial stress in Macau is unlikely to spill over into their U.S. entities. “There are no guarantees between parents and subsidiaries,” Fitch added.
