The social messaging service is crucial to connect North American casino operators with players from mainland China, meaning Wynn Resorts, MGM Resorts International and Las Vegas Sands could be severely impacted.
Trump issued an executive order last Thursday that will make it illegal for US citizens and corporations to carry out “any transaction related to WeChat”. While there are few details on how the WeChat ban will be implemented, it will come into effect within 45 days of issue.
According to Carlos Lobo, a Macau-based lawyer at Weir and Associates and former legal adviser to Sands China – whose parent company is Las Vegas Sands – 95% of Macau’s gaming patrons are mainland Chinese, making WeChat an essential communication medium.
Lobo added that the ban could be an unexpected fluke for non-American casino operators like Melco, SJM Holdings and Galaxy.
“This problem applies across the board to any US company in China: How can their local Chinese teams communicate with their bosses without WeChat? The mainland Chinese tourists will prefer to go to Melco, Studio City, SJM or Galaxy rather than Sands, MGM, or Wynn. This has a toxic effect on competition that ultimately has a negative impact on the US casino operators,” Lobo said.
Ben Lee, managing partner at IGamiX, a Macau-based consultancy firm focused on the gaming industry, estimated that up to 90% of gross gaming revenues at Macau’s casinos come from mainland Chinese, noting that it’s nearly impossible to advertise in China without WeChat due to marketing restrictions.
“The casinos are not allowed to advertise in [continental] China so their marketing hosts do use a lot of social apps to contact their clients and communicate promotions. If they are deprived of this channel, in the absence of any other channel, they will be severely disadvantaged compared to their [non-US] peers,” said Lee.
