US casinos in Macau could be harmed by Trump’s executive order
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US casinos in Macau could be harmed by Trump’s executive order

Categories: offline casinos, other Posted on 8 Jan 2021 96 0

Trump bans Alipay and seven other Chinese apps

The recent executive order by US President Donald Trump to ban many high-profile Chinese apps could spell trouble for the three US casino operators in Macau. Macau is one of the world's casino capitals, but it faces some significant economic challenges at the moment.

The executive order was revealed on Wednesday by Mr. Trump, who is just two weeks away from leaving the Oval Office. If passed, the order will ban the use of the following eight Chinese apps for all US-based businesses and individuals: Alipay, WeChat Pay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate and WPS Office. The move will push distributors of Google, Apple and other apps to delete them from their US stores.

A result of the escalating tension between Washington and Beijing is the executive order. The move is largely motivated by national security issues and data privacy concerns, although the order does not list more concrete reasons.

"The United States must take aggressive action against those who develop or control Chinese connected software applications to protect our national security," the order said.

President Trump's order says "by accessing personal electronic devices such as smartphones, tablets, and computers, Chinese connected software applications can access and capture vast swaths of information from users, including sensitive personally identifiable information and private information."

Nothing is set in stone yet, however. The due date of the executive order will be almost a month after Mr. Trump departs from the Oval Office and Joe Biden replaces him.

In certain cases, such as climate change, political analysts expect Mr. Biden to resume cooperation with Beijing. There is growing doubt, however, that Mr. Biden, given the growing global discontent with Beijing, would introduce some major changes. Yet, Mr. Biden may consider the ban to be more trouble than it is worth.

Implications for business

If the order is accepted, Sands China, MGM China and Wynn Macau Ltd. will have major consequences for Macau's three US casino operators. Across China, Macau and Taiwan, social media and finance applications such as WeChat have become ubiquitous. They are a cornerstone of communication at this stage and banning them will hamstring the internal and external communication of US operators.

The simpler of the two to compensate would be internal contact within or between teams and market segments. Nevertheless, interaction with consumers often occurs via these potentially-banned applications.

In the relationship between Washington and Beijing, not overturning the order could also set a dangerous precedent. The government of Mr. Trump has shown a willingness to strike the private sector to achieve its political objectives, while Beijing has become highly vulnerable to retaliation. This latest move could even further make things sour.

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