INDUSTRY OPINION 50
Sudhir H. Kalé*
Clouds gather for U.S. operators in Macau The COVID-19 pandemic has taken a huge toll on casino revenues in Macau with U.S. operators such as Wynn Resorts and Las Vegas Sands bleeding more than $2 million a day in the 2020 second quarter.
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o make matters worse, President Trump’s spats with China continue on multiple fronts such as the “China virus”, tariffs, Chinese expansion in the South China Sea and allegations of spying. The latest salvos fired by the Trump administration are the banning of TikTok and prohibiting U.S. citizens and companies from using WeChat in their business dealings. Over 90 percent of communication that Macau casinos have with their customers in the Mainland is carried out using WeChat. The three U.S. operators in Macau could therefore face a serious competitive disadvantage in marketing to their customers. Long term, all concessions in Macau come up for renewal in 2022, and the actions of the U.S. government could also adversely impact the prospects of concession renewal for the U.S. operators.
Asia Gaming Briefings | September 2020
As all industry observers no doubt realize, it is not legal to market the casino product in China. Advertising of casinos or even visiting clients with the intent of getting them to gamble in casinos carry stiff penalties—a hard lesson learned by Crown Resorts of Australia in 2016. Consequently, most communication with potential customers in the Mainland on the part of the six casino operators in Macau is conducted through the medium of WeChat. WeChat, better known by its Chinese name “Weixin,” has become the medium of choice for both casino operators and customers. Facebook and Instagram are pretty much banned. The danger and uncertainty surrounding COVID-19— not to mention the regulations on either side of the Macau-China border—have kept loyal customers away. Also, the Chinese government’s clampdown on online
