Las Vegas Sands’ stock price has fallen by nearly $11 per share, about 20% of their value, since the start of April.
The Nevada-based company currently has no U.S. casinos. But it remains the world’s largest gambling operator thanks to its interests in Macau and Singapore.
The prevailing theory among investors and analysts is that the frosty economic relationship between the U.S. and China under the previous Donald Trump administration could return if Trump is reelected in November.
That could hurt Sands interests in Macau, which is a Chinese Special Administrative Region, and its stocks have reacted accordingly.
That is an interesting take, considering reports that Sands’ owner and billionaire Miriam Adelson has financially backed Trump’s campaign this year with at least tens of millions of dollars.
Despite overseeing a post-pandemic boom in stock prices, Trump’s first year as president in 2018 saw the top companies of the S&P 500 fall an aggregated 4.6% in value over the year.
Trump’s odds of being reelected have surged in recent weeks, particularly after he dodged an assassination attempt, and his incumbent opponent Joe Biden made a series of high-profile mistakes.
Sands’ Fall
During Trump’s first year of his previous presidency, Macau gambling stock value fell by 26.7% as he took a hard-line stance on trading with China.
The Macau gambling market showed consistent growth throughout this time, actually seeing revenues increase 40% in 2018. But that did little to calm investors after Trump’s incessant trade war rhetoric.
And then, of course, the pandemic hit in early 2020, which derailed the global casino business for well over a year. And also took the life of Sands’ founder, Sheldon Adelson.
Macau’s gambling market was much slower to recover than Las Vegas, which came back with a bang in mid-2021, and hasn’t really stopped since. Sands sold its Nevada gambling operations in 2022 to keep its Asian businesses afloat.
This period actually saw Sin City briefly overtake Macau to once again become the world’s biggest gambling city. But the Chinese enclave has since regained that title, as it properly opened for business again in late 2022.
Investor Sentiment
However, analysts believe that some of the stock price slump for Sands is simply the market’s memory of what happened to prices last time Trump took charge. If his policies change significantly on Chinese trade this time, then things could be different in the longer term.
The reported $100 million donation made by Miriam Adelson to Trump’s campaign should help their cause with Trump’s potential government if he does get elected.
On the other hand, although Trump’s odds of winning have been on the rise while Sands’ stock falls, there isn’t exactly proof of causation. Investor sentiment in Sands has also been soured a little by lower-than-expected revenue growth over the past two months in the Macau market.
David is an online casino expert who specializes in online slots and boasts over 10 years experience writing about iGaming. He has written for a wide range of notable publications, including eSports Insider and WordPlay Magazine.
David graduated Derby University with a BA Degree in English Literature and Creative Writing.
