‘Macau can outstrip Vegas in two years’

September 13, 2022 Macau Emerging Markets Industry Updates

A gaming consultant predicts Macau’s casino industry could easily recover over the next two years and bring in twice the revenue of Las Vegas despite currently being in the “doldrums”.

Ben Lee from the Macau-based firm iGamix said he doesn’t expect a recovery this year as the territory depends on the mainland for visitors and is therefore “locked in” with Beijng’s Covid-19 strategy. However, he noted that at its peak in 2013, Macau grossed revenues that were nine times those of America’s gambling hub and said that just as Las Vegas had bounced back this year, “we expect Macau to recover very easily to, let’s say, $10bn in a period of two years’ time… or twice the revenue of Vegas.”

Ahead of Wednesday’s deadline for bids on a new tender, Lee said “at least three” newcomers had been put off bidding by tougher requirements such as greater cash reserves and a shorter licensing period of ten years instead of 20. However, he believes all existing operators will have submitted bids.

“A whole series of new requirements on top of the zero Covid strategy makes it almost impossible for any newcomer to calculate how they will generate return on investment over this 10-year period,” Lee said. “That makes it untenable. However, I do expect the existing six operators to retender. They’ve sunk tens of billions of dollars in, so it’s a no brainer to resubmit for a new concession.”