Macau authorities are further placing pressure on gaming operators to highlight non-gaming activities – in particular cultural projects and sporting events – by setting up a mechanism to gather project applications and forward them to the operators.
Announced on July 4th, the Cultural Affairs Bureau notes that the project encompasses a ‘forwarding mechanism for cultural and sports projects’, noting that gaming operators can ‘analyze and respond (to the applications) independently’.
The move comes even as the city awaits to hear the government’s non-gaming diversification agenda – delayed as it evaluated the proposals from Macau’s six gaming concessionaires.
The six operators, under their 10-year gaming licenses which commenced on January 1st, are required to turn in an annual development plan, including a breakdown of expenditure.
This particularly focuses on non-gaming – as the six companies have pledged some $14.8 billion in investment over the 10 years, of which over 90 percent is on non-gaming.
The new mechanism will be open to ‘cultural and sports associations of Macau, companies or individuals’.
The relevant parties must create a business plan – including the objectives of the event, date, time, location, budget, projects which require support and a viability evaluation, among other content.
This is first evaluated by the Cultural Affairs Bureau and the Sports Bureau, which only forward on the material if it is deemed to fit the criteria – one which is not specifically defined – at least within this first announcement.
The push for more locally-inspired events and the integration of local associations, companies and individuals is not new – as seen by the various recruitment and business matching sessions the six operators have been consistently carrying out for years.
However, the shift to entertainment and sporting events could be a welcome refresher for a city starved for entertainment during COVID.
However, as experts have pointed out, Macau is no Las Vegas – and such event revenues are unlikely to contribute any significant amount to revenues, and are more likely to be money pits for the companies.
But operators are backed into a corner, being within the first year of their new concessions and still testing the waters of how the government will respond to their development plans, the only path forward it to build, spend, attract, and offset losses by maximizing visitor spend.
A good example is Galaxy Entertainment Group’s bet on Korean pop super-group Blackpink, which saw 13,000 visitors per night during their two-night concert run. While many of those attending didn’t stay overnight, and if they did many didn’t stay on the property itself, the visibility, hype and media exposure greatly helped not only the launch of their new Arena, but also highlighted the company’s non-gaming commitments.
The group also has planned a music festival, in partnership with Tencent’s music arm, later this year.
Integrated resort operators are also trying out smaller-scale sporting and cultural events, such as a snooker tournament, coupled with culinary festivals and showcases – aimed at shifting clients around their properties – and ideally onto the gaming floor.