New Macau Leader Looks To Diversify Gambling-Reliant EconomyIsland’s Gaming Sector Continues To Rebound |
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Macau has long been a bastion for casino gambling and remains the top casino market in the world. The island functions as a separate special administrative region of China and is the only place in the country with legal casinos.
As a result, the region has become heavily reliant on gaming, attracting well-heeled gamblers from the mainland. That may be changing after former judge Sam Hou Fai was recently elected in an uncontested vote as Macau’s chief executive-designate. The new leader is hoping to diversify the island’s economy.
“Sam has promised to accelerate the current government’s plan to boost tourism and other sectors such as traditional Chinese medicine, finance, exhibitions and commerce,” the Associated Press reports. “However, the city will still need to rely on the gambling industry for government revenues to support the city’s welfare and accomplish other goals laid out by Beijing, analysts say.”
Gaming Remains Critical To Island
In a recent speech, the new leader outlined how he hopes to accomplish this by improving the island’s overall business conditions and supporting small businesses. That could include using public funds to stimulate business sectors outside of gaming.
The island took a major economic hit during the COVID pandemic when travel was greatly reduced, leaving casinos empty. Chinese officials are looking for a wider economy on the island now beyond casinos.
Despite that, the gambling sector remains extremely important. The island continues seeing major gaming revenue growth, as Macau remains the world’s top casino destination. Poker tournaments also returned earlier this year, although the World Poker Tour was forced to cancel an event in May.
Investment bank JP Morgan remains bullish on the island’s gaming sector overall, and has estimated October revenue at around $2.7 billion. That’s an increase from other estimates in the $2.5 billion range.
“While it is still too premature to call it a ‘positive wealth effect,’ we can say that month-to-date demand suggests October GGR (gross gaming revenue) is likely to reach ~MOP$22 billion ($2.7 billion), well above the MOP$20 billion to MOP$21 billion that we and the market had expected only few weeks ago/ This should at least limit the downside risks to 4Q consensus, in our view.”
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