In one of his last moves as President of the United States, and while dealing with protestors overtaking the Capitol, President Trump has issued an executive order that could ultimately cause issues for some U.S. companies operating in Asia. The order bans eight Chinese payment apps and prohibits any U.S.-based persons or companies from using them, and, as a result, U.S. casino operators with properties in Macau might find it more difficult to maintain their normal business activity. MGM Resorts International, Las Vegas Sands and Wynn Resorts are now trying to figure out what is going to happen next.
As the relationship between the U.S. and China continues to sour, Trump decided to prohibit the use of WeChat Pay, Alipay and others, and also requires that the apps be removed from Apple’s App Store and Google Play in the U.S. The order reads, in part, “The pace and pervasiveness of the spread in the United States of certain connected mobile and desktop applications and other software developed or controlled by persons in the People’s Republic of China, to include Hong Kong and Macau (China), continue to threaten the national security, foreign policy, and economy of the United States.”
The move might never be worth more than the paper it’s written on, since President-elect Joe Biden will have the authority to reverse the move after he takes office on January 20. There is also a strong possibility the order will be contested in court in a similar fashion to what was seen after Trump banned WeChat and TikTok last August. That ban led to lawsuits and federal court discussions that resulted in the order being blocked by judges.
Platforms such as WeChat are used extensively throughout Asia and much of Macau’s casino industry relies on them daily to carry out their normal functions. There will be a lot of resistance to the executive order, just like there was last August. At that time, David Sisk, the chief operating officer for Melco Resorts & Entertainment’s Macau Resorts, stated, “It’s kind of a silly thing in terms of the statement that was made that you’re going to cut that off. You’ve got over a billion people and WeChat is the primary device in which they communicate. [It’s] a primary device in which a lot of commerce is done as well.”
The new executive order doesn’t go into effect for another month, which should give Biden enough time to work on getting things under control. In the meantime, it’s highly doubtful that any U.S.-based company will heed the order, instead, choosing to maintain their status quo until cooler heads prevail.
