Macau is just 5% of Singapore's size. It's less than half the size of Manhattan. It has more than 35,000 hotel rooms, 30 restaurants and 25 UNESCO World Heritage Sites. The gaming revenues are six times that of the Las Vegas Strip.
It is one of the wealthiest places in the world.
Alidad Tash worked for 10 years in Vegas and Macau with the Sands organization, she is an expert in gaming operation and strategy. Macau's gaming revenue was $36 billion in the pre-pandemic year of 2019.
70% of Macau's GDP is gaming. "It's unbelievably high," said Tash, who now runs his own firm.
The government's "common prosperity" messaging is at odds with the fact that the wealth is in the hands of a few. In September, officials announced a regulatory change. Macau's gaming licenses will expire in June 2022.
The timing of the announcement is in line with Beijing's regulations, and it means that gaming operators will have to follow new rules or lose their licenses. There were hints of Chinese officials in charge of the world's largest gambling hub. The shares of casino companies, particularly American operators, plummeted.
Insider spoke to casino development strategists and consultants who said that getting Macau to add non-gaming elements will be a challenge. Macau is small. It's a victim of its own success because it focuses on gaming as its sole cash cow.
Macau is a victim of its own success because it focuses on gaming as its sole cash cow.
The images are of Tibor Bognar.
Not everyone will get more money.
Victoria Fuh is the vice president of Macau Meetings, Incentives and Special Events Association. Fuh told Insider that when she arrived in Macau, most meeting planners didn't know where it was. It is on the list of venue options for international conferences.
New hotels and attractions are added to Macau every year, so it's always fresh for our clients.
Stanley Ho's family held a monopoly over Macau's gambling industry since 1962, and they still do today. When Macau broke the monopoly in 2002, five more casino operators entered. They operate 41 casinos.
The casinos brought in a lot of money. Macau is the only place in China where gambling is legal, and casinos have been open for 20 years.
"Macau's GDP per capita shot up from a low in 1992 to a high in 2020," said Ben Lee, managing partner of IGamiX Management. Most of the wealth is in the hands of a few.
There's a lot of money in Macau, but there's also a lot of wealth disparity.
Polybutmono /
The government gave 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 888-269-5556 The amount of money given to residents was 15,000 patacas in 2020.
The annual lump sum is "nominal" according to Lee, who has lived in Macau for 16 years.
"China sees how this creates social problems in Hong Kong and wants to avoid the same outcome in Macau," Lee said.
Macau's Gini coefficient, which is used to measure inequality, would have been 0.4% if it weren't for subsidies and welfare benefits.
The government reports a low poverty rate of 2.3% in 2017, but it ignores the cost of living that accompanied the casino boom.
There are other issues in Macau. The Macao Institute for Tourism Studies says that crime has increased since casino licensing was liberalized in 2002.
A whole generation of young people dropping out of studies to work in the gaming industry because of its financial rewards is one of the social problems, according to Robbert van der Mass. Many small retail shops and restaurants have disappeared as they couldn't compete with the salaries offered at casino resorts.
No supplier gets rich when casinos make money.
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A one-trick pony.
Macau is well positioned for tourism, as shown by the fact that 90 percent of Macau's 39 million arrivals were from Hong Kong and the mainland.
DSEC figures show that there were 60 times more tourists in Macau in 2019. The average length of stay in Macau is just 1.2 days, which is less than in Singapore and Hong Kong. The high number of day-trippers accounted for over half of arrivals in 2019.
Macau's gaming deregulation in 2002 was meant to make the city a world center for tourism, while Hong Kong became an international financial center. That didn't happen.
Macau became China's center for gambling. In 2012 there was an anti-corruption campaign and a series of anti-gambling edicts, but the casinos' non-gaming revenue never really got off to any significant volume, staying at about 5% of their gross revenue.
Experts interviewed said this compares with 50% in Vegas and 30% in Singapore.
Some of the experts said that non-gaming creates more jobs than gaming and benefits small- and medium-sized suppliers more.
No supplier gets rich when casinos make money. There is a lot of work involved in a hotel room. Non-gaming gives more wealth to the community than gaming.
The gaming industry in other countries such as Japan, South Korea, and the Philippines is increasing competition for Asian customers.
Jui-Chi Chan.
Keeping Macau relevant.
Macau has a chance to change its gaming history with its gaming licenses set to expire in eight months.
"This isn't a renewal, it's a new open tender and anyone can bid for a new concession," said Lee. He said the government will likely demand clear non-gaming plans that extend beyond restaurants and retail.
Lee said that the government wants to see real non-gaming attractions in Macau, such as the development of meetings and conventions, entertainment, art, and other attractions.
Some of the tourism experts spoke to Insider and said that a shift to more non-gaming could be good for Macau tourism. It's a chance for the city to change in line with the times.
The MGM Grand Macau opened in 2007. Over the years, he has noticed a huge shift in Chinese travelers' behavior towards culture and experiences in food, retail, and entertainment.
Integrated resorts are under pressure to adapt their offerings in Asia because of the customers' exposure to leading trends in the world. "To build more retail and meeting facilities without changing them is no longer acceptable," said van der Mass.
The gaming industry in other countries such as Japan, South Korea, and the Philippines is increasing competition for Asian customers.
The demographic of gaming travelers is changing. The Pandemic only drives more of this behavior because young travelers are inclined towards gaming online. Ian Wilson, who runs the Wilson Innovation Lab, said that he thinks there will be a transition in Asia towards more non-gaming.
There are attempts at moving beyond gaming.
The push for more non-gaming is being followed by casino operators in Macau.
The Venetian and The Parisian are casino resorts. The Venetian is the largest casino in Asia. Venice's canals and a replica of the Eiffel Tower are some of the attractions that Sands tries to attract leisure visitors to. The Londoner will include replicas of London landmarks like the Houses of Parliament, Big Ben, and David Beckham's suite at one of the hotel towers.
The Londoner will include replicas of London landmarks, as well as being a new resort.
The Macao Hotel Marketing is courtesy of the Sheraton Macao Hotel.
The project has 351,000 square feet of gaming space and 369,000 square feet of meeting space. There is enough retail space to fit 130 stores and 40 restaurants.
While the move does reflect a shift away from gaming, it does not address Macau's Euro-Asia history and heritage.
Leonardo Dioko, a professor at the Macao Institute for Tourism Studies and a director of a tourism research center in Macau, said that gaming has overshadowed the development of other potential attractions and has overshadowed some of the original character of Macau.
A power play.
Some skeptics think that the regulatory changes are a power play by China to gain more control over the outflow of money from the country and to push for the adoption of a digital currency.
The target date for the implementation of the PRC digital yuan is 2024. "China wants to make sure that Macau is ready for the conversion when they want it to be," said Ben Hirasawa, founder of BH21, a firm that advises hotels and real-estate clients on project development in Asia.
The review's timing may be opportune for China, but it's a blow to Macau tourism, which has been battered by the Pandemic. Macau had six million arrivals in the first nine months of the year, a fraction of the 39 million visitors in 2019.
"Although there have been times throughout the year where we can see a glimpse of hope and travel recovering, it quickly changes when there is an outbreak somewhere close by or locally," said Janet McNab, who heads the St. Regis in Macau.
Macau's success, even though it is, is at stake because the entire infrastructure upon which it has been built is at stake. It's not clear if the niche it carved out for itself 20 years ago will still exist.
"Macau is a place for gaming," Wilson said. Chinese nationals might prefer to gamble in Vietnam, Cambodia, Singapore, or the Philippines because they won't have the same level of scrutiny as they would in Macau.
