Media mogul's MGM retreat dodges risky China wager

MGM Resorts International

24/09/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Refiles to add RIC in paragraph 6.
By Katrina Hamlin
HONG KONG, Sept 24 (Reuters Breakingviews) - Barry Diller's bid to double down on MGM Resorts International MGM.N was too big a gamble from the start. The People PPLI.O chair's decision, announced on Wednesday, to ditch an offer valuing the casino operator's enterprise at $18 billion means the American will dodge an even riskier wager than the one he envisioned making. 
The media mogul's bid to buy the 73% of MGM that he doesn't already own through People rested on a simple idea: a bet that live entertainment will thrive in an AI-obsessed world. The proposal, made public on June 1, pegged MGM’s worth at nearly 8 times forecast EBITDA, similar to the multiple assigned to Caesars Entertainment CZR.O in a deal just days earlier.
But unlike Caesars, around one-quarter of MGM’s revenue comes from Macau. The gambling enclave, a territory of China, has long been exposed to economic and political headwinds from the People's Republic, which supplies more than 70% of visitors. Those headwinds are picking up.
On the very same day People made its offer, Beijing published a new set of regulations on wealth crossing its borders and imposed strict fines for firms and individuals who flout the rules. A month later, China said it would start taxing individuals’ income from assets placed in offshore trusts. That was followed by tighter curbs on travel, aimed at protecting China’s industrial and technological interests.
Those campaigns have collectively made aspiring high-rollers reluctant to leave mainland China to visit and splurge in the territory, according to Macau-based consultant Ben Lee. Total gambling revenue in the hub remains stuck below pre-pandemic levels and is now expected to grow just 5% for the full year, according to analysts at Seaport, down from their earlier expectations for more than 7% growth.
Although MGM’s Macau unit — the Hong Kong-listed $5 billion MGM China 2282.HK — has outshone local peers in recent years, roughly doubling its market share since 2018, it is nonetheless on track for a rough year. MGM China’s adjusted EBITDAR fell 15% year-on-year to $257 million in the quarter to June, and its shares are down 25% year-to-date.
Gamblers can recover their confidence all too quickly. But the pattern is hard to ignore: from President Xi Jinping’s 2012 crackdown on corruption to Covid chaos and 2026 policy shocks, Macau is exceptionally vulnerable to China risk. People’s shares rose 4% in after-market trade on Wednesday, while MGM Resorts tumbled 11% to $33.7, nearly one-third below the offer price. Diller’s decision to fold looks like a lucky escape. 
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CONTEXT NEWS
Media group People has withdrawn its proposal to purchase all the outstanding shares of casino operator MGM Resorts International that it doesn't already own, according to announcements from both companies on September 23. 
Barry Diller, People chair, said his company remains interested in a possible strategic transaction with MGM and looked forward to considering a range of alternatives. People retains its existing 27% stake in MGM Resorts.
Shares in MGM Resorts closed down 2.7% to $37.85 on September 23. In after-hours trading, the decline in MGM Resorts extended to nearly 11%, while People rose nearly 4%. 

(Editing by Una Galani; Production by Ujjaini Dutta)
((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))