How is the US-China trade war affecting gambling

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Donald Trump became the first president to ever set foot in North Korea last June when he went over quickly to rekindle his bromance with infamous totalitarian leader Kim Jong-Un. The decision was highly criticized around the world, all while Trump protesters concluded that this was an act that showed that by standing with Kim Jong-un he approved of his regime and all its decisions.

The trade war that was started by Trump has, of course, evolved into strained diplomatical relationships with the Chinese, with his new-found friendship with the totalitarian North Korean leader being one of the reasons for the rupture.

The big question, however, for gamblers, operators and other gambling-related and operational organizations is how will the trade war affect the relationships between the two countries in regards to the gambling sector. Last summer, in June, the Chinese Ministry of Foreign Affairs publicly declared a warning for its citizens. The declaration was directed at Chinese individuals that lived in the US, tourist that planned travels and companies operating or planning to operate there in the future.  “Recently, US law enforcement agencies have on multiple occasions used methods such as entry and exit checks, and on-site interviews to harass Chinese citizens in the US.

“The Foreign Ministry and the Chinese Embassy and Consulate in the US warn Chinese citizens and Chinese-invested institutions to raise their safety awareness, strengthen preventative measures and respond properly.

The warning directed to the citizens was concluded with a suggestion that advised people to contact the consulate in the United States in case of an emergency. The message did not explicitly state that people are forbidden to go into the US, but rather urger them to be extremely cautious and only visit us if needed. The effect was very much felt in Las Vegas, the favorite gambling destination for Chinese high-rollers and veteran players alike. With a very high influx of Chinese players every year, the gambling capital of the world flourished in the last few decades. The most affected table game was the baccarat, where revenue generated by the game has dropped year-to-year by an incredible 55%, down to $54.6m.

This drop is more than huge and of course, is deemed to be a big problem if the situation continues. Looking at the overall context results, it’s even worse. Blackjack is one of the most popular table games in the world and it made the most revenue at Nevada’s casinos, with a 12$ drop down to $90m. Combined, all of the other table games generated less than $40m. While not being the main attraction overall and when talking into consideration the whole population present at the tables and in the casino, baccarat is the number one choice for Chinese and Asian players. Furthermore, the silence and unwillingness of President Trump to consider the matter and start negotiations to reconciliation is more baffling considering that the businessman owned and operated several Las Vegas casinos over the years.

The US-located casinos are not the only ones affected by the trade war, however, as Macau also has three US casino brands that are operating from the island. Being considered the world’s largest gaming hub, Macau hots the Sands China, Wynn Macau and MGM China. Furthermore, the situation is not helped by the position of several Macau officials, who publicly declared that they consider diversifying the island scenery and are not imperative on helping the US casinos, as things stand.

While Las Vegas is definitely considered the gambling capital of the world, Macau crushed the Nevada establishment when it comes to gambling gross revenue. Hard to believe for people outside of the business and non-gamblers alike, Macau’s gross revenue is no less than 6 times bigger than the Las Vegas one. The 2018 casino total win was around $37.68 bn in Macau, while Las Vegas managed ‘’just’’ around $6.59bn. The tricky part and what makes Macau’s situation even more delicate is the fact that the majority of the revenue is coming from the three US establishments.

Analysts and gambling specialists alike attribute the fact that most of the gross revenue comes from the US brands to the economic slowdown in mainland China and the ongoing protests. Also, stricter regulations imposed by the DICJ bearer do not help the matter. The managing Partner at IGamix Management and Consulting, Ben Lee, speculates that this trend will sadly continue well into the future unless some prompt and direct measures are taken by the President of the US.

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