Trump’s WeChat Ban Will Hurt US Interests in Macau: Analysts

Posted on: August 11, 2020, 05:42h. 

Last updated on: August 24, 2020, 06:25h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

President Donald Trump has banned Chinese social messaging giant WeChat for “undermining national security.” But the move could have unintended consequences for American business interests in Macau, analysts say.

Trump's WeChat Ban Could Hurt US Interests
China’s WeChat is the fourth-biggest social media platform in the world, with more than one billion registered users. But it is set to be banned by the Trump administration as a security threat. (Image: South China Morning Post)

US casino operators in the world’s biggest gambling hub rely on the messaging app as a crucial marketing channel to connect to potential customers on the Chinese mainland. This means LVS, Wynn Resorts, and MGM Resorts International may lose valuable business to foreign competitors who are untouched by the ban.

The three US casino giants — LVS and Wynn in particular — get a prodigious chunk of their overall gaming revenue from their Macau operations, the vast majority of which is generated by visitors from mainland China.

Communication Lockdown

On August 6, Trump issued an executive order that will prohibit US citizens and companies from conducting business transactions via WeChat after September 20.

With 1.2 billion users — most of whom are in China — WeChat is the fourth-biggest social media platform in the world.

As well as instant messaging, it’s used to pay bills, consume news media, play games, and listen to music. Third-party developers from Starbucks and Amazon to the Wynn Macau all have their own mini-apps on the platform.

“Probably 95 percent of Macau’s gaming patrons are mainland Chinese. How do you communicate with them? WeChat,” said Carlos Lobo, a Macau-based lawyer at Weir and Associates, to The South China Morning Post Tuesday.

This problem applies across the board to any US company in China: how can their local Chinese teams communicate with their bosses without WeChat?” he added.

“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.”

Is WeChat a Security Threat?

It is unclear whether WeChat represents a genuine threat to US security, or whether it is simply a pawn in the ongoing trade war between America and China.

Beijing has for several years been blocking US social media platforms, including Facebook, Twitter, Twitch, Instagram, and YouTube, as part of its “Great Firewall” policy of internet censorship. And, according to the BBC, the WeChat platform appears to be a “key instrument of China’s internal surveillance apparatus.”

Prior to his death, Wuhan doctor Li Wenliang warned colleagues via WeChat about a wave of strange acute pneumonia cases he had observed in the city. He was silenced by authorities for “spreading false comments.”

Li died from COVID-19 on February 13, age just 33, as Beijing continued to censor information about the disease that killed him on the WeChat platform.

Meanwhile, hundreds of thousands of Chinese Americans use the app to communicate with relatives in China, and there are fears it’s all too easy for Beijing to gather information on American citizens.

But it is also expedient for America to “decouple” itself from Chinese technology and to make the US economy less intertwined with China’s.

Amid talk of a new “Cold War,” Washington is also eager to stop the Chinese tech revolution in its tracks, even if it’s at the expense of the US businesses that wish to engage with the Chinese market.