Wynn Resorts CEO Matt Maddox said strained relations between the U.S. and China over the past few years could soften under the incoming Biden Administration, which would benefit the three U.S. casino operators in Macau.
Maddox, whose company operates three resorts in Macau, said last week “world peace and stability are 100 percent reliant on a functioning U.S.-China relationship.”
Wynn, along with Las Vegas Sands and MGM Resorts International, has seen revenues from Macau diminish considerably this year. The gaming market overall has experienced an 80.5% decline due to the COVID-19 pandemic. Furthering the uncertainty, Macau’s gaming license concessions expire in June 2022, and the government has yet to release its plans for a renewal process.
Wynn CEO Matt Maddox discusses U.S.-China relations and other topics on ‘Cards on the Table’
During a 16-minute discussion with American Gaming Association CEO Bill Miller as part of the trade association’s Cards on the Table interview series, Maddox was asked about Macau and the “difficult stretch” resulting from trade disputes and tensions between the superpowers.
“China is moving fast. They have a lot of development,” Maddox said. “We’re going to be competitive, but we need to be competitive in a functional way.”
Maddox said Macau offers the perfect example of how the two countries work toward a common goal. He said Macau was the “entertainment piece” of the rapidly developing Greater Bay region, one of the world’s largest metroplexes.
“We’re an American company over there, and we try to do what we can to invest in the community and help achieve those goals,” Maddox said.
In Macau, Wynn operates Wynn Macau, Encore Macau, and Wynn Palace on Macau’s Cotai Strip. The company also plans to spend $2 billion on the non-gaming Crystal Pavilion, a hotel and entertainment complex next to Wynn Palace. Construction on the project is expected to begin next year.
Macau gaming revenues have been decimated in 2020 due to the COVID-19 pandemic, which struck the Special Administrative Region of China beginning in January, canceling the market’s lucrative Chinese New Year’s celebration activities. Tourism is only now slowly returning.
Wynn became the first U.S. gaming company to openly discuss the strained U.S.-China relations back in August through a regulatory filing with both the Hong Kong Stock Exchange and the U.S. Securities and Exchange Commission. The company said tensions could result in “contentious punitive or retaliatory measures being imposed on businesses and individuals.”
Maddox told Miller his hope was that the Biden Administration recognizes that a functioning relationship between the U.S. and China was vital.
“Both sides hold their grounds on what’s important to them,” Maddox said. “No one needs to capitulate. We need to recognize where the common goals are and work toward achieving them.”
Maddox didn’t discuss the concession renewals. However, a week ago, Macquarie Securities gaming analyst Edward Engel, who is based in Hong Kong, said Macau officials are focused on the pandemic and economic recovery, increasing odds that current gaming licenses will be extended beyond 2022.
“If policymakers are averse to a messy and drawn-out ownership battle, then gaming licenses will need to be renewed at generally favorable terms,” Engel said. “In fact, regulators’ intentions to re-tender licenses in just six months gives us more conviction that policymakers intend to maintain the status quo.”
During the discussion with Miller, Maddox touched on several topics, including Wynn’s early leadership in creating health and safety protocols for the gaming industry; COVID-19’s impact and how Wynn has adapted; a return of large events and live entertainment; the success that integrated resorts will have post-pandemic; and industry predictions.
Maddox said his experience working in Macau during the SARS outbreak helped shape his response to COVID-19.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
