Is Gambling Moving Out of Macau?

Macau is starting to look beyond gambling as its main source of income, at least that is what the city’s chief executive Fernando Chui, is planning. He announced on Monday that he expects the monthly average gambling revenue for this year will be 27 percent lower than last year as he moves to reduce corruption and focus the city on other revenue sources such as tourism.

There has already been a slowdown this year in the number of high rollers and wealthy middle class visitors to Macau’s casinos, as the slowing Chinese economy and tighter restrictions have made a gambling trip to the city less attractive. With so much of the local economy dependent on the revenue from the casinos, this could have a disastrous effect unless the city can quickly provide alternative reasons for tourists to visit.

macau-casinos-skyline

The city was already feeling the pinch at the end of last year as the economy shrank 17 percent, largely due to casino revenues falling by 2.6 percent in the final three months of the year. This was the first time in recent history that casino revenues have fallen and gave a sharp insight into what could happen if the transition away from casino revenue dependency is not properly managed.
One of the key elements of the new plan is to encourage more visitors from the Chinese mainland. To facilitate this, the Macau administration is planning to submit a proposal to the government to streamline the travel policies for Chinese tourists. The problem with increased tourism is that the city already receives more than 31.5 million visitors a year which cause issues such as overcrowding.

With gross revenue from gambling expected to decrease from $3.2 billion to $2.5 billion this year, it is essential that the Macau tourism panel moves quickly to draft and implement its promised five year plan to expand the city’s tourist attractions. Already there are moves underway to improve the airport amenities as well as increasing airlines services.
Whether Macau will manage to fulfill these lofty plans is yet to be seen. It will certainly be a difficult time for the local and foreign owned casinos as the city deals with its conflicting goals. If the process is not managed correctly, the results could be devastating for this gambling paradise.

March 28, 2015 by : Posted in gambling news No Comments

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