Macau is about the only place in China where you can freely gamble. As a former Portuguese colony Macau enjoys some liberties that other Chinese provinces do not, becoming a special administrative zone in 1999. As gambling was legal under Portuguese rule, this stayed after the Portuguese handed over the territory to China. Now it has become Chinas most bustling and only gambling territory. It also seems that there are Macau casino expansion plans in the works.
But what are the plans of Macau to expand their gambling operations? And how is this seen from the view of the Chinese government, as they ban gambling everywhere? Read along and find out in this article from QMRA!
What are the Macau casino expansion plans?
Macau holds the title for the biggest gambling hub in the world. However, where money is made, even more money can be made, so expansions are always on the board. As Macau wants to hold its place in the world as the insanely large gambling hub that it is, it must keep up the pace. Endless expansion was never really an option but there is still room for growth. Expansions can also mean multiple things, as there are more than one type of expansion possible. For instance expansion can mean:
- Expanding in real estate, creating more casinos;
- Expanding in revenue to make the gambling operations in place more profitable;
- Expanding in both.
Typically expansions in Macau will be a mixture of expansions in the number of gambling opportunities as well as expanding in profitability or net income. Also don’t forget that Macau in Novembre 2024 was still getting back from the pre-corona revenue era, meaning their revenue shrunk in the pandemic quite a bit. During the pandemic they lost almost 100% percent of their casino revenue. The main reason being, that almost all their gambling revenue is from physical casinos, which all needed to close their doors. Their GDP consequently dropped by 58%. In the past five years Macau has been on survival mode and just crawling back from the pandemic, which left a huge financial whole in its budget.
Expanding the Macau casinos: How will they do it?
Expansions might not be so easy. As we said firstly they will have to be back up to the pre-corona pandemic times. Fortunately for Macau it is expected to be back on this level in 2026. After they have regained their revenue expansions can begin. One thing the corona pandemic has learned Macau is that diversification is key to longevity. As a consequence casinos are not just trying to expand their casino businesses but also see other opportunities.
Such is the case with the MGM group, which is seeking millions in loans to expand their non-casino related operations. They are also trying to reach more mass-market players, which are more generic casino halls. This type of gambling holds a far higher revenue per square meter than table casinos. The expansion of their casino hotels is also in the making, expanding by a couple of thousand rooms.
Non-gambling improvement
Another initiative for diversification and resilience is to rate casino operators by how they contribute in Macau with non-gambling related investments. The biggest six companies need to invest 130 Billion MOP (around 16 Billion US Dollars) into other markets, as to receive or keep their licenses. The investments must be done in areas such as; theme parks, sporting arenas and cultural facilities. With this strategy Macau hopes to attract a more diverse tourism audience, which does not solely rely on the gambling income to survive.
Does this mean other gambling investments are off the table? No of course not, it only means that aside from the gambling investments 16 Billion US dollars must be invested in other project. With revenues of hundreds of Billions this should be feasable for these companies.
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