Macau has now been steadily increasing its gambling revenue for 14 months. The territory’s growth surpasses the Chinese 6.5% national target, with revenues currently sitting at $2.7 billion. As an autonomous territory, Macau is famous for being the only place in China with legalised gambling and the main Asian hub for gaming tourism.
This has allowed it to become the most successful gambling hub in the world in terms of revenue, surpassing Las Vegas in 2007. Its current success is attributed to a significant increase in VIP guests and high rollers to the city, as well as increased prosperity and interest in gambling in mainland China.
Macau’s revenue streak comes after a successful summer for the island, despite typhoons causing significant flooding and destruction. Whilst a few casinos had to shut down parts of their operations, most of the big resorts on the main Cotai Strip were untouched. Visitor numbers experienced a small dip in August, and it is estimated the typhoons lost $1.4 billion in revenues for the city. The opening of an MGM casino on the Cotai Strip has also been delayed to next January due to damages suffered to the construction site.
The 16.1% year-on-year growth Macau is currently experiencing is particularly good news, following a previous 26 month period of consistent year-on-year declines. This happened in 2013, after Chinese President Xi Jinping’s anti-corruption campaign cracked down on the city’s junket system, which attracted high rollers to the city with luxurious VIP perks.
Smaller junket operators have recently started opening more gambling rooms, which is expected to attract further growth in the VIP market. Whilst the crackdown a few years ago drove away the biggest players from Macau – the ‘super whales’ who were known to lose up to $19 million on a single night – the city has been able to compensate with a huge sector of mid-range VIP players.
Macau’s profits are set to further increase this month. From October 1st to October 7th is Golden Week in China, a week-long national holiday commemorating the foundation of the People’s Republic of China. During this time, almost half of the population of China is on the move, travelling around the country for tourism or to visit friends and family. It is expected that Golden Week will bring even more visitors to Macau, as the city starts to focus on becoming a tourist destination as well as a gambling one. Some of the bigger casino owners in the city have reported that their hotels are fully booked for the Golden Week season.
Macau’s tourism office recently unveiled its Industry Development Master Plan, which aims to double the city’s non-gambling revenues by 2020. They also plan to attract almost 10 million new visitors a year, and make the city more attractive for long-term stays. This involves a shift in Macau’s tourism towards the mass market, and will involve significant investment in non-gambling entertainment and amenities. This follows the example of Las Vegas, where non-gaming revenue now sits at 64% following a shift in focus towards hotels, fine dining, and big entertainment acts.