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Expert: Macau Government and Gaming Operators Need to Reconsider Plans for Market Sustainability

May 10, 2023 Macau Industry Updates

Macau is renowned as the “gambling heaven” throughout the Asian market. It appears, nonetheless, that it has difficulties with non-gaming investments. According to Zeng Zhongly, a professor at the Macao Polytechnic University’s Center for Gaming and Tourism Studies, in order to establish economic diversification in the area, gaming operators from the city would have to try to repeat the same errors that already occurred with non-gaming investments.

More money being invested in non-gaming projects:

The professor believes that in order to succeed with non-gaming initiatives, more imagination is needed. If gambling companies want to succeed during their 10-year concessions in Macau, they must adopt that strategy.

The government of Macau recently concluded that developing and putting into practice new strategies are essential milestones in the process of diversifying the local economy. In the first quarter of this year, six gaming companies already filed their plans, which assisted the government in revising its plan. The audience will learn more specifics about the revisions at the public hearing, which is set for June.

In response to this development, Zeng made the statement that “future-oriented planning” is essential for local government. The government should work on studying technical advancements and how they match up with consumer preferences, among other things. However, if the study reveals that customers want something else, both operators and the government should be prepared to rethink and adapt their plans. Zeng emphasized that frequent tourists are essential to Macau’s tourism business because the local market is essentially nonexistent. If Macau wants to keep its place in the Asian market, it must adapt the market to meet the needs of the visitors, who are primarily from Hong Kong and mainland China.

New suggestions from the game companies:

Operators had to submit their proposals and investment plans as part of new contracts the government had signed with them during the first quarter of the year, so they did so on March 16. Now it’s up to the government to review and modify its own policies in order to provide the ideal environment for the expansion of a robust gaming industry. The COVID-19 pandemic and travel restrictions have had a significant impact on Macau at the moment, and although revenue started to rise when the curbs were lifted, the market will take longer time to recover.

The government wants casino operators to devote more funds to non-gaming establishments in Macau, and the operators consented to do so by increasing their spending on MICE, entertainment, and sporting events.

Some operators, like Studio City and Galaxy, introduce brand-new non-gaming facilities. It may take some time before the corporations receive some of the many billions of dollars invested in these facilities returned because they weren’t counted as part of the investments needed to obtain the new licenses.

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