From Nevada to Macau, a former Portuguese colony and a special administrative region of China, the only one where there are casinos, the geographical step is truly long. And the cultural step is long too, given that the inclination to gaming in Asian countries is based on tastes, attitudes, habits, and regulations that are very different from those of Westerners. However, in an increasingly global world, the challenges and problems, from artificial intelligence to the limits placed on gaming to ensure safety and legality, tend to become the same. Just like,the traditional link between gaming and tourism, typical of the casino “capitals” is unravelled from local governments and operators in las Vegas e Macau in many initiatives and aspects.
These are the topics we discuss with Ricardo Chi Sen Siu, associate professor in Business economics at the Department of Finance and Business Economics of the Faculty of Business Administration of the University of Macau.
The year is now coming to an end. What kind of 2024 has it been for Macau and its six casino concessionaires?
“2024 is a year exhibiting appropriate recovery in Macao’s casino tourism. Alternatively speaking, it is on track. As projected by Macao Special Administrative Regional Government in 2023 that the casino industry will derive a gross gaming revenue (Ggr) of Mop216 billion (equal to €25.489.813.408 at the current exchange rate – editor's note) in 2024, the industry has realized a Ggr of Mop190.142 (88%) in the first 10 months. It is reasonably to expect that 2024 will end with a Ggr of around Mop225 to 230 billion which is slightly higher than the projection by the government but less than that of the market expectation of around Mop 240 to 260 billion. To myself, this result is appropriated and healthy.”
Do you think that Macau and its casinos are succeeding in their attempt to diversify their activities beyond “simple” gaming, as also required by the government, when proceeding with the tender for the release of the new concessions?
“Yes. Through the recovery of gross gaming revenue, the industry (integrated resorts, Irs) meets their responsibilities to support the expansion of non-gaming tourism in the Macao economy. For example, expansion of the “concert economy” is largely supported by the efforts of the Irs to make use of their large-scale arenas and comprehensive internal facilities. Though the cooperations and supports of the Irs, non-gaming hospitality and entertainment spendings by the tourists clearly increased in 2024.”
In a world increasingly dominated by online and artificial intelligence, what place will land-based gaming have?
“Progress of online gaming and Ai will have different impacts on land-based casino gaming across different continents (i.e., the scale and scope that will be influenced will not be the same) owing to the differences in their contextual settings. Generally speaking, it is my opinion that land-based casinos will not phase out and they will continuously be part of the tourism industry in various existing destinations, especially in Asia. Since expansion of online gaming and Ai cannot replace physical tourism, land-based casinos can provide a kind of 24/7 entertainment for tourists. This is the reason that Japan will open its first integrated resort (by including casino gaming) in the earliest of 2030 and the Thailand government is currently in the process to legalize casino gaming as a strategy to foster its local tourism. These are actually the arguments that I presented in my new book 'Developing the Frontiers of Casino Tourism: Progress and Prospects in East and Southeast Asia' which just came out few weeks ago. However, the environment in Asia is quite different as compared to Western Europe.”
In many European countries, and for some time now, prohibitive or restrictive measures on gambling advertising have been taken into account or adopted. What is the situation in Macau?
“Macao government does not have regulation on prohibiting gambling advertising. Thus, Macao’s casino operators are able to promote their business. However, since over 95% of the patrons in Macao’s casino are from outside Macao, especially from Mainland China and Hong Kong, whether or not the casinos can advertise their business outside Macao is totally dependent on the related laws there.
For example, as the Chinese government has revised Article 303 of its Criminal Law in mid-2020 and put into effective on March 1, 2021, which prohibits anyone to promote or organize citizens of the Prc in mainland China to gamble outside the border of mainland China, Macao IRs can only promote their non-gaming business without any gaming contents.”
The link between gaming and tourism is strong, especially as regards world gambling capitals, such as Macau or Las Vegas. Is Macau coming back to the levels that were achieved before Covid?
“In 2019, Macao’s reported Ggr was Mop292.455 billion, in which Vip plays accounted for Mop153,228 billion and mass-market plays Mop157,227 billion.
As aforementioned, Ggr in the first 10 months of 2024 was Mop169.355 billion, in which mass-market plays accounted for Mop128.583 billion. If the whole year of 2024 achieves Mop225 billion, it is reasonable to estimate that the mass-market segment will be higher than Mop160 billion which is higher than that of 2019.
However, to the total Ggr of Mop292.455 billion in 2019, it may still take at least another four to five years (i.e., 2028 or 2029) for Macao to get back the fall in the Vip segment (owing to the elimination of the third-party operated Vip gaming rooms from January 1 2023 under Macao’s new gaming law). However, since the Vip plays in the past largely involved questionable transactions, to refill the fall in Vip plays with general spending by the mass market patrons through longer time is understandable. This transition is indeed more sustainable for the industry.”