Game Supplier Suspends Sales To US Amid Tariff Wars

LT Game announced that it would not supply the US with slot machines and other gaming equipment due to high tariffs.

The company’s chairman and managing director, Jay Chun, stated, “We won’t be selling to the US in the short term. We’ve held off for the time being because the tariff on a gaming machine is more than 100% and it’s hard to compete with products made in the US.”

LT Game specializes in producing slot machines, electronic table games, and live dealer betting terminals that are predominantly used in Macao casinos. In 2014, they partnered with International Game Technology (IGT) to distribute their gaming equipment across the US and Canada.

A big step into the US market came in 2015 when Nevada approved the use of the company’s gaming equipment in state casinos.

Tariffs affecting gambling industry

Trump had announced that many tech products including smartphones, chips, and computers were exempt from the tariffs. That has not extended to gaming machines, however.

Despite this, experts think there will be little impact on the gambling industry due to its recession resilience. Char Beynon, an analyst at financial services firm, Macquarie Group stated,

“Bottom line, we still think this is an industry that will be recession-resistant, given the dynamics of who the customer is, their income, and our belief that they have created a lot of wealth during the past five years.”

The brick-and-mortar casinos are likely to be hit more than the online gaming industry. If slot machines and other gaming equipment becomes more difficult to import that could reduce customers.

Jordan Bender, analyst at Citizens Capital Markets and Advisory, also noted that states like Nevada could be affected by the tariffs. Commenting on the trade wars with Canada, Mexico, and China, he stated,

“Inbound travel from these countries has the potential to hurt MGM and Caesars in Las Vegas, as well as consumer spending in Macau (MGM-related). Outside consumer demand, the cost of materials (food, beverages, etc.), and project spending for new or upgraded properties could be impacted.”

Effect on online gambling

With a reduced flow to physical casinos, online gaming can continue to thrive. Tariffs are likely to have far less effect on online casinos and crypto casinos that can offer all the same slots and other games.

Some companies may, however, reduce their presence in certain markets. For example, bet365 announced last month that they are withdrawing from China.

The news that Chinese gambling suppliers are withdrawing from the US gives more opportunity for alternative gambling sites to cash in. As government restrictions increase, alternative platforms can capitalize. Unregulated gambling companies generate far more revenue than legalized gambling already. That trend could be amplified by the tariff wars.