The founder of the gaming consultancy IGamix, Ben Lee, expressed concern over the potential impact of the ongoing tensions between China and the United States, particularly regarding the video platform TikTok and the ports operated by Hong Kong’s CK Hutchison in Panama.
“If China adopts the same retaliatory strategy it has been employing,” the possibility that U.S. gaming companies could be compelled to sell their Macau operations to Chinese businessmen “increases significantly,” stated Ben Lee.
He noted, “I think after the U.S. threatened to delist Chinese stocks from their exchanges, ‘everything is on the table’,” referencing the statement of the U.S. Treasury Secretary.
On Wednesday, in an interview with Fox Business, Scott Bessent refused to dismiss the possibility of requiring Chinese companies to leave U.S. exchanges, stating, “That decision will be up to President Trump.”
As the world’s gambling capital, Macau is the only place in China where casino gambling is legal. The territory hosts six concessionaires, including three U.S.-based companies, Las Vegas Sands, MGM Resorts, and Wynn Resorts, with new contracts effective from 2023.
The executive director of CreditSights, Nicholas Chen, reminded that these new concessions might be revoked “for threats to national or Macau SAR (Special Administrative Region) security,” or for “public interest reasons.”
“However, what would constitute such a threat has not been explicitly defined by the authorities,” emphasized Chen, who is part of the Fitch ratings agency group.
“We have not seen any indication, to date, that the Macau or Chinese governments are targeting Macau-based U.S. gaming operators over national security issues,” Chen added.
He acknowledged concerns over Macau’s classification as a “foreign adversary” by the United States in February, which imposed restrictions on local companies’ investments.
Vitaly Umansky, an analyst with consultancy firm Seaport Research Partners, expressed skepticism about potential risks to Macau.
“There are far larger targets in China if the country truly wanted to make a point,” the expert noted.
The Chinese authorities “have already targeted a variety of U.S. companies in mainland China, which they believe are sensitive points for the Beijing government, primarily in technology and health sectors,” he recalled.
However, Ben Lee suggests that rather than altering concession terms, the Macau government might introduce new laws “restricting the repatriation” or transfer of funds from local subsidiaries to their U.S. parent companies.
Vitaly Umansky doubted this could occur, warning that Macau might lose its reputation as a “favorable environment for foreign business investment.”
On Thursday, an economist from the University of Macau stated that the trade war might impact companies’ investment plans.
In 2023, when the new concessions came into effect, operators committed to investing over 100 billion patacas (12.8 billion euros) in non-gaming elements.
“I believe that investors worldwide may be inclined to change their investment goals in the context of such high tariffs,” commented Kwan Fung.
Vitaly Umansky is confident that operators “will invest everything they promised,” but acknowledged doubts about “the timing and specifics of their investments.”
“There have been numerous obstacles. The [Macau] government has been slow in approving projects and has not made more land available for development,” he lamented.
