Inside Asian Gaming

AUGUST 2018 INSIDE ASIAN GAMING 31 companies in Macau, others can also bid for a license. Casino liberalization in early 2000 saw 18 qualified companies bidding for a Macau casino contract. Incredibly, Macau now rakes in the same amount of gross gaming revenue every three or four weeks as it did in one full year during Macau’s handover era. Needless to say, Macau’s casino market is a highly attractive financial proposition. The current casino concessions, who have built massive integrated resort infrastructure and committed huge fiscal investments on the Macau Peninsula and the Cotai Strip, will of course all re-tender, while there is no doubt others will see this as a rare and lucrative opportunity unlike any other. But this must be balanced within increasing Chinese Government The issue of casino policy in 2020 and beyond is increasingly critical as it will determine Macau’s future tourism landscape. sentiment and a wish to see Macau diversify beyond gaming. Before Macau’s handover, Chinese visitation to Macau represented less than 10% of the city’s tourism, today it’s over 60% of total annual visitation. Macau’s dependency on Chinese visitation and high net worth gamblers has meant, as seen in the massive casino revenue drop in 2014- 2015 caused by the corruption crackdown in China, that Chinese Government policy will continue to impact Macau. The economic “Dutch disease” phenomenon and the squeezing out of other major industries due to the huge financial impact of the gaming industry in the past 20 years has meant that Macau’s major diversification has all been tourism and hospitality related and therefore reliant on the casino companies as to how this has occurred. Macau’s public finances have also become increasingly reliant on taxes and fees from the gaming industry. In 2017, Macau Government data showed that 85% of its total taxation revenue came directly COLUMNISTS Macau’s tourism industry has developed a heavy reliance on Chinese visitation