Page 49 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Consumer

on whether the business can continue in two or projects with long-term returns to the city. Yet
three years,” Ma says. “if operators try to play international politics in
American casino companies may be particu- Macau, they may get into trouble,” he says.
larly vulnerable. “The trade war has increased Meanwhile, money is already flowing into
the risks for the U.S. operators,” says Ben Lee, smaller hubs such as Vietnam and the Philippines
a Macau-based managing partner at Asian gam- and newer locales, including Japan, where law-
ing consulting firm IGamiX. That American com- makers this year approved a landmark bill legal-
panies hold half the licenses in Macau “already izing casinos. More junket operators, including
does not sit well with Beijing,” he says. Suncity Group’s Lo, are expanding their opera-
Some executives are taking a more optimistic tions to Vietnam and other locations amid the
view. MGM Resorts Chief Executive Officer Jim uncertainties in Macau.
Murren says he doesn’t believe U.S.-China ten- Although the first casinos in Japan aren’t
sions will affect Macau’s licenses. “It’s not for me likely to open until 2025, the country is already
to say, but I believe that Macau is a very unique expected to become a major rival to Macau
economic engine for China and the Macau govern- and possibly lure away some Chinese tourists.
ment, and I just don’t see it playing heavily into a “I’m mostly worried about Japan—and even the
global trade narrative,” he says. Macau government now seems to be acknowl-
Carlos Lobo, a Macau lawyer and gaming con- edging that,” Lobo says. “I think the Philippines,
sultant who’s advised the government, says he Vietnam, and South Korea are somewhat
expects applicants to be treated fairly, regardless complementary to Macau, but Japan is a direct

of their nationality—particularly if they focus on competitor.” <BW> �Daniela Wei, with Lisa Du

Hot Seat Elon Musk

43
▷ The Tesla chief succeeded in rolling out his lower-priced
electric car this year� But 2019 won’t be a victory lap

This was a tough year for Elon Musk, who Jan. 1, then half again on July 1, now that
navigated car production hell to finally Tesla’s total sales of new-energy vehicles
bring Tesla Inc.’s Model 3 sedan to mar- have exceeded 200,000.
ket but tried to take his company private The company also faces financial chal-
via tweet—and got sued for it. Now, 2019 lenges. It has a $920 million convertible
promises a number of other potential bond coming due on March 1. Manage-
speed bumps. ment hopes investors will swap that for
While Tesla turned a corner in Octo- stock, but if Tesla’s shares fail to reach
ber after its initial stumbles trying to $360 by then (they were about $340 on
mass-manufacture an electric car for Nov. 13), the company will be on the hook
the first time, Musk still hasn’t delivered to pay the money back. While the auto-
the $35,000 version of the Model 3 maker is finally starting to generate cash,
that he promised years ago would bring it’s still far from flush, with only about
electrification to the mainstream. He’ll $3 billion left in its coffers.
have to master the difficult balancing Musk must contend with closer scru-
act of rolling out cheaper versions of his tiny from Tesla’s board in 2019. His run-in
mass-market car to boost sales without with the U.S. Securities and Exchange
sacrificing Tesla’s efforts to attain sus- Commission over the botched buyout
The SEC is making tained profitability. cost him the role of chairman, and two
Tesla put in place Complicating matters for Musk will new independent directors will have to be
protocols to closely be the decline in U.S. government incen- appointed later this year. The SEC is also
oversee Musk’s public tives for buyers of electric vehicles. The making Tesla adopt protocols to closely
communications— $7,500 federal tax credit toward the pur- oversee Musk’s public communications—
including his tweets chase of Tesla’s EVs gets cut in half as of including his tweets. ——Craig Trudell