Casino Suppliers Quit Macau for Resurgent Singapore, Philippines

September 6, 2022 Singapore Emerging Markets

Suppliers of slot machines, baccarat table systems and other casino equipment are moving out of Macau to more welcoming markets, evidence of the damage China’s Covid Zero policy has wrought on the formerly bustling gambling hub.

With demand in Macau waning, Light & Wonder Inc., a leading provider of products used in casinos, is relocating its expatriate staff to the Philippines, which has become its top market in Asia and where it is opening a new office. Another equipment maker from Japan is also shifting employees to the Philippines and Singapore.

The Japanese company is moving as many as 30% of its employees and has taken more than half of its inventory out of Macau due to supply-chain challenges, a person familiar with the matter said, asking not to be identified discussing information that wasn’t public. The person also asked for the company not to be named. It has seen revenue plunge about 90% in Macau as casinos shelved purchasing plans amid a prolonged industry slump.

Macau’s casinos aren’t buying any new equipment until they get licenses to continue operating at the end of the year, and without fresh sales, Light & Wonder is only getting limited revenue from maintenance and technical support, said Ken Jolly, the US company’s Asia vice president and managing director.

“The Philippine market has become a dominant market in Asia, and it makes sense for us to put more staff there,” Jolly said.

Fading Away
After well over a decade as the world’s pre-eminent casino center, Macau ceded that crown back to Las Vegas as Covid lockdowns and China’s travel bans choked off the usual flood of people coming in by air, sea and land. Prior to the pandemic, Macau’s gambling market — heavily reliant on mainland customers — was six times bigger than Vegas’s, with annual revenue of $36 billion.