The Trump administration’s WeChat ban may hamper the operations of American gaming operations in the Macau SAR, as a significant percentage of their patrons are from mainland China, reports the South China Morning Post.
The messaging app is vital for connecting U.S.-based casinos Wynn Resorts, MGM Resorts International and Las Vegas Sands, with clients from mainland China.
Last week, U.S. President Donald Trump issued an executive order which will make it illegal for U.S. citizens and corporations to conduct “any transaction that is related to WeChat” made by any person or “any property” subject to the jurisdiction of the United States.
The U.S. president labeled WeChat a threat to national security and accused it of gathering “vast swathes” of user data, threatening Americans’ personal and proprietary information.
Trump also declared that TikTok, along with WeChat, was a “national emergency” due to security concerns. The executive order will take effect 45 days after it is signed.
According to several reports, insiders have expressed their concern regarding the executive order as WeChat is China’s most popular communication medium. Mainland China is Macau’s largest visitor source market.
Carlos Lobo, a Macau-based lawyer at Weir & Associates and former legal adviser to Sands China, noted that the ban could be an “unexpected fluke” for the three non-American casino operators, namely Melco Resorts & Entertainment, SJM Holdings and Galaxy Entertainment Group.
“This problem applies across the board to any U.S. company in China: How can their local Chinese teams communicate with their bosses without WeChat? The mainland Chinese tourists will prefer to go to Melco, Studio City, SJM or Galaxy rather than Sands, MGM, or Wynn. This has a toxic effect on competition that ultimately has a negative impact on the U.S. casino operators,” the legal practitioner told the SCMP.
WeChat, which is owned by Tencent, has nearly 1.2 billion monthly active users, the majority of whom are in China. The ban may make it challenging for these casino operators to penetrate their largest market.
For Ben Lee, managing partner at IGamiX, it is nearly impossible to advertise in China without WeChat due to marketing restrictions.
He estimated that up to 90% of gross gaming revenues at Macau’s casinos come from mainland Chinese visitors.
“The casinos are not allowed to advertise in [continental] China so their marketing hosts do use a lot of social apps to contact their clients and communicate promotions. If they are deprived of this channel, in the absence of any other channel, they will be severely disadvantaged compared to their [non-U.S.] peers,” said Lee, according to the SCMP.
On the other hand, China has blocked several American apps, including Facebook, Google and Twitter.