The chief executive of MGM Resorts International (MGM), Bill Hornbuckle (pictured), brushed off concerns about a Chinese government crackdown crimping profits in the world’s largest gambling market of Macau, saying he doesn’t view it "as a major challenge."
His concerns that China's new regulatory attempts to exert tighter controls in the gambling enclave would fundamentally alter the growth opportunities in the market.
“Until proven wrong, I'm not and we're not overreacting to what is being hyped or said. We are hoping rational minds control in the end because this is the Macau economy.” Bill Hornbuckle said.
Macau has operated as the gambling capital of Asia for two decades, as the only jurisdiction under Chinese rule allowed to operate casinos. Revenues generated from the country’s high-rollers have become increasingly important to American casino operators like MGM, Wynn Resorts (WYNN), and Las Vegas Sands (LVS), with Macau’s casinos generating six times the revenue of casinos in Las Vegas, earning $360 billion in 2019, according to Bloomberg data.
So, when Macau’s Secretary for Economy and Finance announced last month that it would begin a review of the casino industry to tighten government oversight over operators, that sent stocks plummeting. Shares of Macau casino operators shed a third of its value, roughly $18 billion in one day.
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