Amid extended GGR plunge

Macau: at least four casino suppliers reportedly exploring relocation into Philippines and Singapore due to lack of demand

Reading time 1:50 min

As gaming around the world rebounds, and businesses slowly begin to recover from the effects left by the Covid-19 pandemic, Macau's struggle is far from over. According to the latest reports, suppliers of slot machines, baccarat table systems, and other casino equipment are moving out of Macau to more welcoming markets.

In another sign of the damage that China's Covid-19-zero policy has wrought on the formerly bustling gambling hub, demand in Macau has decreased leading several providers to take the decision to relocate. Moreover, casinos are not buying any new equipment until they get new licenses to continue operating at the end of the year.

In light of this, gaming products provider Light & Wonder is relocating its expatriate staff to the Philippines, which has become its top market in Asia and where it is opening a new office, reports The Strait Times. According to Jon Kelly, the American company's Asia vice-president and managing director, the company is getting only limited revenue from maintenance and technical support

Additionally, another equipment maker from Japan is also moving employees to the Philippines and Singapore. The unnamed company is relocating as many as 30% of its employees and has taken more than half of its inventory out of Macau due to supply chain challenges, sources familiar with the matter told the cited source. The move comes due to the fact that the firm has seen revenue plunge about 90% in Macau as casinos shelved purchasing plans amid a prolonged industry slump.

Macau Gaming Equipment Manufacturers Association chairman Jay Chun said he knew of "at least four multinational casino suppliers" relocating manpower and resources overseas. The trend could accelerate after the government announced a cap of 12,000 gaming machines for new operators starting 2023 under a new casino law. 

Macau was under pressure even before the pandemic struck, with Chinese President Xi Jinping cracking down on high-rolling gamblers in the territory as part of a campaign against money laundering, corruption, and capital flight.

The territory’s six licensed operators -including Sands China, Wynn Macau, Galaxy Entertainment, MGM China, SJM Holdings, and Melco Resorts- are set to rebid for their spots as their contracts expire at the end of the year. The bidding process kicked off in July, and operators can submit their proposals until September 14. 

The gaming industry is facing tough challenges in what used to be the world's biggest gambling hub. Pestered by the largest Covid-outbreak since the beginning of the pandemic, all of Macau's casinos reported half-year lossesThis and the strict amendments to the gaming law have made it difficult for the industry to stay afloat. According to Jefferies analyst Andrew Lee, Macao is unlikely to see a firm recovery until 2023.   

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