International edition
September 23, 2021

“We're well on the way in Macau,” AGA President Fahrenkopf said

Macau: casino operators to diversification

(Macau).- While gaming revenue soars to new records, Beijing and Macau officials are preaching the gospel of diversification. Casino operators are hearing the message and trying to expand Macau's menu for visitors. But don't expect Las Vegas-style shows and attractions to outshine - and out-earn - gaming any time soon. Instead, the response is diversification with Macau characteristics.


mong Macau's six casino licensees, non-gaming revenue tops out at 16% for Sands China, which operates the Venetian Macao. Opened in 2007 as a flagship integrated resort and an anchor for the new gaming area in Cotai, the landfill joining Macau's outer islands of Coloane and Taipa, the Venetian includes a 93,000 square meter shopping mall, an even larger convention center, 3,000 hotel rooms, Cirque du Soleil's Zaia, and a 15,000 seat arena. Other operators struggle to reach double-digits in non-gaming revenue. By contrast, before things went bad for Las Vegas in 2008, up to 60% of casino resorts' revenue came from non-gaming activities.

"That didn't happen overnight," American Gaming Association president and CEO Frank Fahrenkopf said of diversification in Las Vegas earlier this month during the annual Global Gaming Expo (G2E) Asia in Macau. "We've been coming to the Venetian [Macao] for four years. You could have shot a cannon through the mall our first year. Now, it's full. We're not where Las Vegas was before the crash, but we're well on the way in Macau. People will come for shops and shows. But that's evolutionary. It's not something that just happens."

Full spectrum momentum
Jonathan Galaviz, chief economist for tourism and leisure consultant Galaviz and Co, believes Macau needs to add a "full spectrum of leisure activities, with gaming a small piece of the picture" to move up the global tourism ranks. "The momentum to build a full-blown leisure destination is there, but it will take decades, not years" he said. "That's okay as long as the business decisions are heading in the right direction."

Those decisions are getting pushed in that direction by the Chinese government's 12th Five-Year Plan, which pledges to support Macau's development as a "world tourism and leisure center", and the Guangdong-Macau Cooperation Framework Agreement signed earlier this year. Under that agreement with its neighboring mainland province, "Macau is expected to transform from a largely casino gaming city to a more family and business travel destination," according to University of Macau associate professor of business economics Ricardo Siu.

"To achieve this end, nevertheless, is not a one- to two-year project," Siu said. "For example, related infrastructure, such as the Hong Kong-Zhuhai-Macau bridge, the light monorail in Macau, the transportation system which supports the construction of a one-hour living area in the PRD [Pearl River Delta], and other elements, must be completed in the coming decade before Macau could really diversify its existing gaming-based economy. In the coming five years, at least, the pace of Macau's diversification may still be slow."

To speed Macau's diversification, Sands China parent company Las Vegas Sands chairman and CEO Sheldon Adelson suggests "the government ought to develop a matrix: if you want to build a casino, then you have to develop a series of amenities". Under such a regime, gaming licenses would be incentivized or punished in terms of the size of their overall project, or perhaps just the size of the casino, based on what non-gaming amenities are provided.

What is your opinion about this article?
  • I like it
    0 votos
  • I don't like it
    0 votos
  • I have not thought about it
    0 votos
Leave your comment
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.
Follow us on Facebook