A Trump victory may elicit a drop out of US gaming concessions in June 2022 if the incumbent U.S. President continues with his strong measures against China, which may force the country to retaliate.
The United States Presidential Election 2020 is being held today [local time], with Americans voting between the incumbent Republican Donald Trump and the Democrat challenger Joe Biden.
Political and social scientist Larry So said that since Trump has held strong measures against China, such as banning social media apps in the U.S. including WeChat and TikTok, and making accusations regarding a turnover of sensitive data and personal information to China’s security apparatus, the ongoing election is set to affect Macau – particularly in the gaming sector.
Previous reports noted that the administration’s WeChat ban could hamper the operation of American gaming operations in the Macau SAR, as a significant percentage of their patrons are from mainland China.
The messaging app is vital for connecting U.S.-based casinos with clients from mainland China.
Currently, there are three U.S.-owned concessionaires in the city: Wynn Macau, MGM China and Sands China.
“It would rather be the start of the cold war [if Trump is re-elected]. It will definitely affect Macau because if the U.S. continues to implement these kinds of measures, China will retaliate with these kinds of embargo,” So told the Times.
“China will […] at most put its foot down, at least in the coming gaming license review. Definitely at least, one of them will […] drop out of the licensing,” he added.
Therefore, So believes that a Joe Biden administration would probably have a less negative impact, stressing that if he wins, Biden is more likely to make compromises in the administration’s negotiations with China.
However, his victory would not mean an opposite outcome in terms of the country’s relationship with China.
“We will only find some moderate kind of measures from Biden – at least the Democrats are kind of more moderate and are more willing to compromise with China whereas the Trump administration is not going to do this,” said the expert.
“That [also] means there will be more discussions and talks over trading and technology,” he added.
Last month, brokerage Sanford C. Bernstein said that it is unlikely that any of the U.S.-owned gaming operators will come up short in their bids for a new concession to operate in Macau, describing such a scenario as “remote.”
So far, Chinese retaliation has been “largely restrained,” according to Bernstein, and has not targeted U.S. businesses operating in China.
“Directly attacking U.S. business[es] (especially ones that have been solid partners to the Macau government) is not a very likely course of action,” the brokerage said.
Meanwhile, according to Ben Lee, managing partner of IGamiX Management & Consulting, “Once the election result is determined, we should see some progress on the gaming concessions as the alternate scenarios would have been game planned by Beijing.”
“In the long run, the operators who are more attuned, not only with the government but more importantly with the market, are likely to succeed in this region. We see Galaxy as one of those; from a building products company to a world class leader in this field in such a short period of time is one for the Harvard case studies,” he added.
Analysts, meanwhile, have stated prior to the current election that the “most likely scenario” involving the new tenders is that all six concessionaires will receive new concessions and that there will be no new entrants.
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