Sam, installed as chief executive in December, has repeatedly called for the Chinese special administrative region (SAR) to move away from gaming as its chief revenue source. He notes that when gaming hits a speed bump — as most notably occurred during the SAR’s three-year Covid shutdown — the city’s fortunes also take a fall.
So far this year, gross gaming revenue (GGR) has fallen short of expectations. City casinos generated MOP18.25 billion (£1.75 billion/€2 billion/$2.28 billion) in January and MOP19.74 billion in February, foiling hopes for a Lunar New Year bump. To achieve lawmakers’ estimate of MOP240 billion for the year, gaming must generate average monthly GGR of MOP20 billion.
“This year’s fiscal revenue may not be as optimistic as expected,” Sam said at a 13 March Two Sessions briefing with Chinese government delegates. “And the future economic situation must be assessed with caution.”
‘1+4’ strategy a multi-year initiative
Covid-19 decimated the Macau economy. When it reopened for business in 2023, former chief executive Ho Iat Seng announced a “1+4” strategy to expand the economy.
Sam endorses the five-year plan, meant to build on Macau’s strength as an international tourism destination while also developing “four nascent industries”. They include “Big Health”; modern financial services; high and new technology; and convention and exhibition, sports and the commercial and trade industries.
But diversification won’t happen overnight. As Sam has acknowledged, reliance on gaming is a “structural problem” that will “persist for a long time”.
With new and emerging competition nearby — Japan will open its first casino resort in 2030, and Thailand is angling to open even sooner — the industry in Macau can expect further contraction.
‘Many difficulties and challenges’
Competition isn’t Sam’s only concern. As he warned at a 19 February meeting of the Macau Economic Development Commission, global economic turbulence and protectionism also pose challenges for Macau.
“As a small-scale economy, Macau cannot remain unscathed, especially as competition in tourism and gaming from neighboring cities intensifies and looms,” said Sam, as quoted by the Macau Daily Times.
“Our country’s economy continues to face many difficulties and challenges,” he said. Among them: insufficient domestic demand, production and operational struggles for some enterprises, and difficulties in employment and income growth for residents.
“These new situations require us to pay close attention and respond appropriately. Macau’s economy is based on the integrated tourism and leisure industry, and is highly dependent on the visitor market from mainland China.”
The Macao Government Tourism Office expects up to 39 million visitors in 2025, just short of the pre-pandemic volume of 2019.
But that figure, and annual estimated GGR, may need recalibration based on the results so far.
Original article: https://igamingbusiness.com/casino/tourism/macau-chief-executive-projected-revenue-gaming-slump/
