Things are not looking bright at the moment in Macau as the trade war between the US and China is slowing their operations down. Once President Donald Trump started the trade war, things became a bit odd in this casino city as there are several casino operators from the United States that operate very successful casinos in Macau downtown.
The former Portuguese enclave was growing rapidly for the past couple of years and became pretty open towards foreign casinos. The thriving gambling industry was very inviting for the American operators who decided to go for it and became a part of the big boom. Now that things aren’t as great as they used to be, these operators may have challenges to solve.
GGRAsia and the Macau News Agency published a report regarding casinos in this city. It contains market assessment which overviews 2019 and how things would look for Macau and the casino operators in it. The company that made the assessment is a very popular corporate risk consultancy agency called Steve Vickers and Associates Limited.
The 2019 Asia Risk Assessment Report made by the agency states that the political tensions between the two superpowers that are currently underway could pose a significant threat to American casinos in Macau. Their local presence could be somewhat diminished, and operators from other parts of the world could gain an unfair advantage. According to the assessment, the local firms may even be encouraged to take over and buy big stakes in the concessionaires that already exist and are owned primarily by investors from the US.
There are six casino operators at the moment in Macau, and three of them are owned by American companies MGM Resorts International, Las Vegas Sands Corporation, and Wynn Resorts Limited. All these operators are very closely related to the Republican Party of the US, which further complicates things as President Donald Trump is a member of that party. The licenses for operating in Macau expire in 2022, which would be a rather interesting year if the trade war between China and the United States continues to rage on.
The challenges for the American operators also depend on the changes that take place within Macau. According to Steve Vickers and Associates Limited, the replacement of Fernando Chi Si On with Ho Iat Seng as CEO of Macau at the end of 2019 could also affect the US operators. Ho is one of the politicians that led a campaign which resulted in ousting Portuguese jurists from the Assembly. Ho additionally stated that he was willing to ‘sinicize’ the gaming sector as well. Consequently, American companies will have to stop all the operations in Macau.
But there is a bright side to all of it as the Government of Macau doesn’t want to destroy what they have been creating for years and finally started to pay off. In other words, American casinos bring revenue to Macau and China alike, which is a reason good enough to try and continue the partnership with them.
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