Macao Issues Three New Casino Licenses
Despite having endured multiple periods of lockdown this year due to the region’s zero policy on COVID-19, which has seen gambling revenue tumble, there could well be a positive sign of things to come for Macao after it awarded licenses to three flagship casino companies.
Issued by the government, it has seen Wynn Resorts, MGM Resorts, and Las Vegas Sands receive new licenses, in addition to three Chinese casinos, on the basis of a promise for diversified investment into non-gambling assets in the region.
Over the last few years, the local economy has witnessed a considerable decline due to the global pandemic in a region that heavily relies on tourism. While other markets have helped to alleviate pressure on these companies’ casino venues in Macao (predominantly the US), there is no denying that it could well be a gamble on both sides.
Vital Cash Injection Needed
An astute move from the decision-makers was to insist that each company invest in the local economy on a larger scale in sectors that have witnessed a sharp decline in revenue as a way of rejuvenating it to its former glory.
The plans that have been proposed have been very much centered around the tourism industry, such as the development of theme parks, hotels, music, and sports venues to complement the heavily populated gambling market and make it more attractive.
It would mean the creation of jobs, improvement and enhancement of infrastructure, and several marketing possibilities that could help to bring business back to the area, with there being hope that lockdowns could possibly be lifted indefinitely.
The three Chinese casino enterprises that have had their licenses renewed include SJM Holdings, Melco International, and Galaxy Entertainment Group, while Malaysia’s Genting Casino was rejected.
Meanwhile, TDM Radio Macao reported that all six entities (which operate a total of 41 casinos globally) could be expected to invest a total of $12.5 billion as part of the agreement, although this figure has not yet been confirmed.
Macao to Gradually Regain Revenue Topspot?
When Macao opened its borders to foreign gambling companies in 2002, there was an intriguing expectancy of what might happen. For decades, Las Vegas had held the mantle as the number one gambling resort in the world.
However, in 2013, the revenue from gambling tables and slots in Macao casinos overtook Las Vegas, generating $45 billion - more than three times that of ‘Vegas’. However, when Beijing tightened restrictions on how often people from the mainland could visit, this figure started to drop.
Just prior to the global pandemic, revenue stood at a still respectable $36.4 billion, and understandably, 2020’s figure was just $7.6 billion (80 percent less than of 2013). Despite lockdown restrictions, revenue from 2021 had climbed to $10.8 billion, indicating that there is still a demand.
With the issuance and renewal of these new licenses, it could signal a new dawn in Macao’s overall economy, especially given the promise of future investment in other areas. This is one to keep an eye on.