The elections to watch for casinos

November 6, 2012 10:04 am

Billionaire casino mogul Sheldon Adelson is likely keeping a close eye on the outcome of the presidential race between Barack Obama and Mitt Romney.

But Adelson and other casino operators may be impacted more by the shift in power in China. The Communist Party there holds a once-a-decade congress starting Thursday that will result in a power shift in its leadership. Those new leaders may look to curb the explosive growth in casino gambling in Macau, where Adelson and other U.S. casino operators, like Steve Wynn, now make the bulk of their profits.

As BusinessWeek reports, there may be “concern about Chinese citizens spiriting wealth outside the mainland to Macau in violation of capital controls, as well as the huge profits being made there by U.S. casino companies.”

The new leaders in China could implement policies designed to curb the rampant corruption that is becoming a threat to the Communist Party’s power. No where is the corruption more prevalent than in Macau, a growing casino capital rife with mobs and prostitution. Adelson’s and Wynn’s respective casino companies are under U.S. investigation for violation of the Federal Corrupt Practices Act.

Any crackdown by the new Chinese leaders could stem the flow of money and tourists to Macau, which is an hour ferry ride from west of Hong Kong. About 28 million people, mostly from mainland China, have visited Macau in the 12 months ending in September. Macau’s casinos raked in $33.5 billion last year, more than five times the amount of Las Vegas.

Adelson donated tens of millions of dollars to help defeat Obama. But in the end, his casino empire may be more impacted by what happens in China than who ends up in the White House.

Comment Policy

Commenters: be rigorous, be powerful, be funny, but don't be mean. Inappropriate and off topic comments will be deleted. Repeat offenders of the policy will be banned from comments.

One thought on “The elections to watch for casinos

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>