Wang Changbin, director of the Centre for Gaming and Tourism Studies at Macao Polytechnic University, says that Macau’s gaming industry is unlikely to recover to pre-COVID levels, as mass market growth is improbable to fill the gap in GGR from the VIP segment.
In an interview with AGB, Wang pointed out that although the Macau recovery so far is encouraging, it seems to lack conditions in Macau, such as land and transportation facilities, to further boost Macau’s growth.
Wang was the guest speaker at the MGS Summit, where he shared his insights in the presentation entitled “Gaming Industry in the Post-Pandemic World and Macau: Trends and Strategies.”
He noted that Macau was left behind during COVID, as Las Vegas’ GGR stayed well ahead of pre-pandemic levels while COVID-19 was still impacting the world. Meanwhile, the Philippines also announced that its GGR this year has already surpassed 2019 levels. The same story also applies to Singapore.
According to Morgan Stanley, Singapore’s gross gaming revenue is tipped to reach $5.2 billion in 2024, exceeding its 2018 peak of $4.6 billion with the return of Chinese tourists. And Las Vegas has achieved an all-time high GGR this summer.
At the same time, the Philippines gaming regulator PAGCOR said that the country’s GGR has returned to near the levels of 2019, which was the year the public operator achieved its all-time high for Philippine GGR levels.
Meanwhile, Macau’s industry-wide 3Q23 GGR is still 31 percent below the 3Q19 levels, according to the calculation of Deutsche Bank following all six gaming operators’ reported financial results.
Under these circumstances, the scholar mentions that Las Vegas made a big bet on sports events, which has achieved unprecedented success. “Surprisingly, the sports teams lure so much younger generation that indirectly benefits the gaming revenue,” he added.
“It seems like the Las Vegas gaming industry was driven by non-gaming events, thus, Macau wants to take advantage of the gaming industry to support the non-gaming development, which is interesting.”
Regarding Macau’s development bottleneck, Wang notes that it’s a good option to consider Hengqin, which is only hundreds of meters away from the Cotai Strip, where most of the casinos are concentrated.
Macau Policy for 2024
Macau’s top official, Chief Executive, has addressed that the SAR is going to be a “capital of entertainment” and a “city of sports events” in the latest policy address for next year, however, when it comes to Macau GGR, Ho Iat Seng considers it “impossible” for the SAR to reach the MOP180 billion ($22.45 billion) goal within 2023.
Wang believes that “the government’s goal to push non-gaming is not to eventually benefit gaming, but in the end, the non-gaming development is positive for gaming revenue in general.”
Chief Executive Ho Iat Seng has praised that since the beginning of this year, various types of large-scale performances held in Macau have ranked first in the region in terms of quantity and quality.
“Although the largest venue in Macau can only accommodate a maximum of 16,000 people, the lighting and sound effects are up to international standards, and the audiences who have come to Macau to watch the performance have a good experience.”
The Macau government is also working on the application for national qualification for the title of “capital of entertainment” in China, and Ho is highly confident that the application will be approved.