Legislators in Macau had surprisingly few questions about the state of the gaming industry this year in a Tuesday session with the SAR’s Chief Executive, despite the top official painting a bleak picture of revenue expectations for 2025 in his Policy Address on Monday.
While the Monday Policy Address and subsequent press conference did highlight uncertainties regarding the trade dispute between China and the United States and the lower-than-expected revenues from gaming operators so far this year, these were not a primary focus in the Tuesday Q&A session on the Address with the Legislative Assembly.
Chief Executive Sam Hou Fai did note that, given the revenues so far this year there is a “need to feel the risk” and “have preventative measures”.
The official highlighted that expenditure from the government is only going to increase, while targeting particularly the fact that Macau closed its borders during the pandemic, noting that this type of expenditure is unsustainable, and also hinting that it happening again is not out of the question.
The executive stated, “if we don’t understand the risk, we can have problems”.
Diversify but don’t ignore casino operators
While acknowledging that gaming revenue contributions to the government account for approximately 80 percent of the total annual coffer contributions, the executive did further the narrative that the diversification of the economy was necessary. However, he did not seem overly confident in the ramp up of these nascent industries in regards to their eventual contribution towards the government’s bottom line, at least in the short term.
The official stressed that, if gaming revenues this year do not meet expectations, the government will fall into a deficit, an acknowledgment that was uncommon to see from the previous administration.
It will be interesting to see how the SAR’s Secretary for Economy and Finance further outlines these details, and expected measures of mitigation, in his own follow up to the Policy Address.
The Chief Executive was firm in assuring that the responsibilities of each government department would fall firmly on the department and the Secretary who leads it. This was not exclusive to the Secretariat for Economy and Finance.
Given the non-political background of Macau’s new leader, this could be seen as a positive, distributing and mandating responsibility across the various departments.
The official did highlight the increased tendency for saving in mainland China – seen even before the US tariff announcements, noting that the “Chinese population has a sense of risk”. This has been evidenced by the increased number of tourists in Macau but the decreased average of spending overall.
Land
One question highlighted by numerous legislators was how Macau is going to use its land bank. The government has recovered numerous lands over the years, of various importance, including that of the Macau Jockey Club, which relinquished its operating license in the SAR.
While not providing any specific plan or study, the top official opined that the land from the former Macau Jockey Club could be used for the diversification of the gaming hub’s economy, in areas such as technology or some form of educational development (details were vague).
The official also highlighted the coastal zone of Macau and Taipa (the neighboring island conjoined to the Cotai Strip), commenting that there is the potential for Macau to develop something along the lines of the Sentosa coastal region in Singapore.
However, no specific details were outlined, with no programmed plans put forth.
The executive commented “we have many strategies, strategies are very important, they could be activated after some years or many years, but they are always important.”
Satellite casinos and labor
In response to legislator inquiries, the Chief Executive also hinted that he was expecting an increase in unemployment and a need for retraining of the employees currently under contract by satellite casino operators.
Under the three-year extension, Macau satellite casino operations are to end by December 31st, 2025.
This runs in tandem with many questions raised by legislators over unemployment and financial difficulties for both Macau workers and small and medium enterprises.
However, in contrast to some comments by the previous administration, the Chief Executive did highlight that Macau had not seen a significant increase in the number of non-resident workers in 2024 in the casino sector compared to the period before the pandemic.
The official significantly highlighted also that the increase in visitation and the needs of tourism-facing operators implied the need for a trained and ready workforce.
However, he did follow the ongoing policy line that Macau workers should be prioritized.
This, in particular, regarding the need for upward mobility within all large-scale enterprises within Macau, especially gaming operators.
