The government of Macao relies on casinos for more than 80% of its income, with the majority of the population employed directly or indirectly by the casino industry.
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With mandatory quarantines lifted, ferry and airline service resuming and licenses renewed, casinos expect 2023 to be a new beginning for Macao, the world’s leading gambling destination.
The Macao government awarded new 10-year concessions to six companies to operate their integrated casino resorts. A concession is essentially an operating agreement with the government, which in turn grants licenses to operators.
To obtain the permit, the casino companies agreed to collectively invest approximately $15 billion in Macau to achieve government goals of diversifying the local economy beyond gambling and encouraging international tourism.
CNBC has also learned that MGM will benefit from the allocation of 200 more gaming tables, although according to multiple sources, the award comes at the expense of competitors, including Wynn’s properties.
las vegas sands and based in Hong Kong Galaxy EntertainmentMacao does not have the largest real estate footprint and is committed to the largest investment.
Sands’ agreement for a $3.75 billion investment, or 30 billion MOP, would be roughly split between capital expenditure and operating expenditure. Most of the investment will go toward non-gaming projects, such as a new convention facility and a luxury yacht experience appealing to foreign visitors, according to a company statement.
An executive at the company who asked not to be named portrayed the financial commitment as a win-win, as it involves investments that probably would have been made anyway – as opposed to operating fees in exchange for a license. Was.
feeling is the same MGM ResortsWhich plans to invest its $2.1 billion commitment in three main areas: culture, entertainment and medical tourism.
This month, Macao has seen a surge in tourism from visitors trying to obtain the mRNA Covid vaccine from mainland China. bioentech The shots are not approved in mainland China, but in Macao, a special administrative region, or SAR, the Macau University of Science and Technology (MUST) hospital offers vaccinations for tourists.
Wynn ResortsA $2.2 billion investment commitment over the next decade will include plans for state-of-the-art theater and restaurant experiences. It also plans to expand its sales presence around Asia and North America to promote international tourism.
Melco Resorts & Entertainment announced the return of its House of Dancing Water extravaganza, which has been suspended since the start of the pandemic. It will also house an indoor water park. The company also plans to focus on medical tourism by building a clinic with MRI and other advanced imaging technology.
Galaxy will build Macau’s first high-tech amusement park. SJM Holdings Will refurbish its defunct floating casino to offer non-gaming entertainment options.
As the government works to usher in a new era, the days of junkies bringing high rollers to the island are over. The crackdown had already curbed that part of the gaming business before the pandemic began. This week, Macao’s Finance Secretary and Gaming Enforcement Agency DICJ announced that they would increase surveillance and enforcement around the tightened borders.
November gaming revenue in Macao fell 23% from October and 99% from November 2019’s pre-pandemic levels due to a surge in COVID infections around China, according to government data.
Even with the resumption of the e-visa program, where Chinese travelers can apply for travel documents electronically, and the easing of quarantine requirements, the Macao government said it expects gross gaming revenue, or expected GGR, which would reflect a 2022 GGR of approximately $16. Arab, as Macao continues to struggle to contain the Covid situation.
But Macau’s loss could be Singapore’s gain. Sands reported third quarter results, which saw a surprise jump in travel and spending after Singapore lifted COVID travel restrictions.
Fitch estimates that Singapore will regain 80% of its pre-pandemic gaming revenue in 2022 and 95% in 2023.