Could U.S-China Relations Affect The Future Of The Gambling Industry?

Photo Credit: REX Shutterstock (5356181e)

China and America are on the polar opposites of the political spectrum to each other. One is the epitome of Capitalism whilst the other of Communism and the relationship between these two superpowers is rocky at best.

However, the two countries still do business with each other despite their differences – click to play slots. This is because both of their economies have plenty to gain from trading with each other. Bill Clinton knew this to be true and in 2000 he pushed Congress to approve the U.S China trade agreement.

Since Donald Trump got elected as the President of the United States, relations between the two have nosedived. In fact, this is also the case with Iran and other countries. Strangely, America’s relationship with archenemies North Korea is rosier than ever.

U.S and Chinese relations have never been easy ever since the Chinese Communist Party leader Mao Zedong established the People’s Republic of China on October 1st 1949. A year later saw the outbreak of the Korean War. North Korea, the Soviet Union, South Korea and the United States were all involved.

Taiwan Straits Crisis that saw America threaten China with a nuclear attack in the spring of 1955 followed this. The Tibetan Uprising added more tensions in 1959. It wasn’t until 1971 when relations between the two showed signs of improvement thanks to the Ping-Pong Diplomacy. China’s ping-pong team invited members of the U.S team to China on the 6th of April 1971.

By 1972 President Richard Nixon visited China and signed the Shanghai Communique that allowed China and the U.S to discuss difficult issues that divided them, such as Taiwan. Further progress was made under the guidance of U.S President Jimmy Carter in 1979 as he granted China full diplomatic recognition and acknowledged mainland China’s One China Principle. Things continued to improve until June 1989 when the world witnessed the Tiananmen Square Massacre.

Another set back came in 1999 when NATO accidentally bombed the Chinese embassy in Belgrade during its campaign against Serbian forces occupying Kosovo. This happened partly due to some U.S intelligence mistakes. This pattern of ups and down continued into the new millennium as China’s economy continued to grow.

Trade War 

In February 2012 the U.S trade deficit with China was at an all-time high of $295.5 billion. By 2018 Donald Trump was beginning to make his mark by announcing tariffs on Chinese imports worth at least $50 billion, in direct response to alleged Chinese theft of U.S technology and intellectual property. The tariffs targeted steel, aluminium imports, clothing, shoes and electronics. In July 2018 Donald Trump imposed fresh tariffs totalling $34 billion and by May 2019, the trade war intensified further with tic for tac tariff rises.

Effects Of The Trade War On Gambling 

China’s Ministry Of Foreign Affairs recently warned Chinese nationals living in America and those citizens thinking of travelling to the United States that U.S law enforcers were using and abusing powers available to them, to harass Chinese citizens both living in and visiting America.

The Chinese Embassy even warned Chinese businesses to be aware of the developing situation and to take emergency action if need be. This warning has had a knock-on effect with the number of tourists visiting the U.S and this includes gambling strong holds like Las Vegas.

Table games like Baccarat that is a favourite with Chinese gamblers, has seen a fall in revenues. Blackjack made the most money from all the table games but revenue from it was still down by 12%.

What About China? 

Macau is one of the biggest gambling venues in the world and revenue in Macau is roughly 6 times larger than that of Las Vegas. Gambling in Macau has been legal since the 1850’s when the Portuguese government legalized the activity in this former Portuguese colony. 

Gambling tourism is Macau’s biggest source of revenue and accounts for 50% of the bustling economy. The cliental here are mainly Chinese nationals from mainland China and Hong Kong, so any further souring of U.S China relations would not have a knock effect with tourist numbers visiting this gambling venue, unlike what we have seen in Las Vegas.

Macau is similar to Hong Kong and is the only place in China where casinos are legal. In fact, American casino brands are allowed to operate in this gambling capital of the world. Chinese officials could target the licenses of these U.S casinos in the continuing trade wars and this will mean more revenue loss for the American economy.

It is unlikely that these casinos will be pulled completely from Macau by their U.S operators. Those in charge of gambling operations on the Chinese side would not want to see them go either, due to the revenue they produce. However, it is thought that officials are looking at other forms of entertainment to boost the economy other than casinos on which they have an over-reliance on.

Final Thoughts 

Through history the relationship between these two nations has been up and down and this is set to continue no matter who is in charge of these great countries. Then there is the competitive nature of their economies, with both countries wanting to have the largest economies in the world and the power that comes with it. 

The affect on gambling seems to be more negative for Americans as fewer Chinese tourists feel welcome in the U.S and if their numbers continue to fall, then Las Vegas will continue to feel the revenue pinch. This may lead to Las Vegas officials downsizing certain forms of gambling that were popular with Chinese visitors.

American casino brands will, therefore, be reluctant to release the foothold they have in Macau, no matter how bad the relationship between the two superpowers gets. Yet their future seems safe thanks to the revenue they bring into Macau’s economy. The ball is in China’s court and at the moment the two nations remain the best of gambling friends despite their political differences.

Posted Under