Donald Trump's insistence on China stabilizing its currency could be a net benefit for gaming industry investors. If China does stop artificially devaluing the yuan, Macau could see even more tourists visiting the Chinese gaming hub, Union Gaming analyst John Decree told TheStreet in an interview.
For months President-elect Trump has signaled to voters that he plans to "get tough" on China, describing the U.S. trade deficit with the country as untenable. Trump's campaign platform has pledged to instruct his Treasury Secretary to label China as a currency manipulator and bring trade cases against the country.
While his rhetoric appealed to Trump supporters, the concern is that that kind of talk could have dire consequences for companies at home that depend on China for growth.
Decree ultimately believes that a Trump presidency will be a net neutral event for the Western gaming industry's relationship with the Chinese government: "Generally the relationship between the gaming industry and Macau is pretty insulated from China's broader market, so even if there are escalating tensions, the casinos in the region probably won't be affected."
The Macau gaming region is the lone gambling hub in a country of 1.5 billion people, and American gaming companies have invested heavily in the region amid declining revenues at home. However, the region has struggled over the last two years, posting 26 consecutive months of revenue declines. Those declines have turned around in recent months as Macau reported three consecutive quarters of revenue growth.