With the US-Chinese relations deteriorating under President Donald Trump, Wynn Resorts has expressed concerns that bad politics could impact business.
Wynn Resorts Anticipates Worsening of Business Climate in China
With the United States drawing nearer to election date, US President Donald Trump has used his gung-ho rhetoric against China generously. He imposed sanctions on several important Chinese companies, not least Tencent, and affected among other things, the gaming market in the country.
Yet, Mr. Trump’s reelection bid will come at a cost, and even if he secures the presidency, his strategy may prove damaging for business. Wynn Resorts, one of the three Las Vegas companies to operate casino resorts on Macau, issued a warning that deteriorating US-Chinese relations and trade tits-for-tats could affect the brand’s business negatively.
Wynn was concerned about the “contentious punitive or retaliatory measures being imposed on businesses and individuals” which have continued to escalate throughout 2020. Presently, Wynn Resorts operates three high-value properties in Macau, including Wynn Macau, Encore Macau and Wynn Palace on the Cotai Strip.
Wynn Resorts also owns 72% of Wynn Macau, indicating the company’s determination to stay competitive and involved in Asia. Trade policies disputes have turned a matter of national security and national and regional politics, Wynn said, anticipating fallout that would damage business.
Commenting on the issue, Wynn had this to add in an official statement: “We are unable to ascertain the scope of the ban at this point and there is no assurance that the ban will not adversely affect our ability to communicate with certain of our customers. Sustained tensions between the United States and China could significantly undermine the stability of the global economy in general and the Chinese economy in particular.”
Wynn Resorts, a Regional Friendly Face
While the United States and China are playing a tug-of-war, Wynn has been, for years now, establishing its reputation as a philanthropic organization putting an emphasis on the well-being of the local community as well as the region.
Wynn has made a point of hiring predominantly Macau and Chinese residents and it has been careful to comply with Chinese regulatory norms in full. With the company’s license up for renewal in 2022 and no guarantees that would happen in the context of a burgeoning global trade war, Wynn has been particularly careful. Other companies share the same fate.
Las Vegas Sands and MGM Resorts International will also have to apply for license renewals in 2022. Presently, Las Vegas Sands is investing another $2.2 billion in renovation and expanding its Macau properties as well as planning a complete transformation of the Sands Cotai Central into the new Londoner Macau, a casino facility modeled after London.
Meanwhile, Wynn is planning to spend $2 billion out of its own pocket to improve the Crystal Pavilion, a not-for-gaming hotel hosting guests in Macau. Results have also been dispiriting in Macau, all brands said, as the free movement of people has not been restored just yet.
In a sense, Macau is taking much longer to recover from the crisis compared to the United States, which already has opened the majority of its tribal and commercial casinos.