Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 23, 2023

Macau casinos to invest US$15b over next 10 years, mostly on non-gaming

Macau casinos to invest US$15b over next 10 years, mostly on non-gaming

Macau said on Friday six casino firms will invest around US$15 billion as part of new 10-year contracts they signed to operate in the world's biggest gambling hub, with the spending on non-gaming activities to exceed gaming spend by more than 10 times.
The signing of the contracts eases fears of investors and executives after a lengthy bidding process that had threatened to end one company's run.

Macau's leader Ho Iat Seng and officials including the city's finance and economy secretary presided over the signing at Macau's Government House together with top executives of the casino companies.

Incumbent operators Sands China, Wynn Macau, Galaxy Entertainment, MGM China, Melco Resorts and SJM Holdings beat off a surprise bid from Malaysia's Genting to win the six licences on offer in the Chinese special administrative region.

The new contracts come into effect on January 1, 2023.

Each casino head was invited to sit at a long red table alongside the government officials as they signed. The executives included Pansy Ho, the billionaire daughter of Macau's gambling godfather Stanley Ho, and who heads MGM Resorts' Macau company MGM China.

The operators are expected to focus on non-gaming activities in the new term, particularly as Beijing is keen for Macau to diversify away from gambling and attract foreign tourists.

The total investment committed by the gaming companies for the development of non-gaming projects is 108.7 billion patacas (US$13.57 billion), with the total investment in gaming projects 10.1 billion patacas, the city's government said.

"The development of Macau's gaming and tourism industry will enter a new stage," it said in a statement issued immediately after the signing.

The stakes could not have been higher for the six companies, who depend on Macau's gambling industry for their profitability but have been bleeding billions of dollars for most of the past two years due to China's strict Covid-19 rules.

A broader crackdown by Beijing on capital outflows from the mainland in recent years, including arresting well known gambling executives in the former Portuguese colony, has also decimated the once dominant and lucrative VIP sector.

Genting, with its strong non-gaming track record and mass market appeal, was a credible threat for the Macau operators, many executives and analysts have said.


Previous attempts by Macau to diversify have been unsuccessful, with casino operators shying away from investing in non-gaming due to the high costs, particularly as the gambling industry was far more lucrative. Macau's gambling industry currently accounts for more than 80 percent of government revenues.

But Macau's government laid out conditions in the bidding that it wants the new license holders to prioritise safeguarding local employment, develop the city's overseas tourism market and boost investment in non-gaming areas, including conferences and Chinese medicine.

While the government's awarding of licenses to incumbents signals stability and continuity for the tens of thousands of local residents employed by them, the companies will face far greater accountability on non-gaming initiatives than in the last 20 years, executives and analysts said.

Operators are expected to invest a total of 100 billion – 120 billion Macau patacas in non-gaming over the next decade, with Sands and Galaxy each committing around 25 billion patacas, and the rest putting up 15 billion patacas, DS Kim, analyst at J.P. Morgan in Hong Kong, said earlier in December.

"These projects will bring new players and tourists into the city, who in turn will spend sizable dollars on gambling," he said.

Macau is heavily reliant on Chinese visitors. Tourists from greater China, including Hong Kong and Taiwan, account for more than 90 percent of total visitation.

(US$1 = 8.0130 patacas)

Related Articles

Hong Kong News
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Goldman Sachs cuts outlook for European bank debt over Credit Suisse crisis
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
The BBC problem about China
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
Announcing GPT-4
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
'No relation to the American SVB': India's SVC Bank acts to calm depositors amid brand name confusion.
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
Saudi Arabia has announced a major breakthrough in diplomacy with Iran after two years of intense talks
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
A primitive judge in Australia sparked outrage when he told a breastfeeding woman to leave his courtroom for being “a distraction"
Barcelona is feeling the heat as they face corruption charges over payments to former vice-president of Spain's referees' committee, Jose Maria Enriquez Negreira
Banking regulators close SVB, the largest bank failure since the financial crisis
Silicon Valley Bank: Struggles Threaten Tech Startup Ecosystem"
The unelected UK Prime Minister Rishi Sunak, an immigrant himself, defends new controversial crackdown on illegal migration
Old clip of Bill Gates saying Ukraine is a big, fat, corrupt sinkhole is going viral
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
2 universities in Hong Kong embrace use of ChatGPT, other AI tools
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
Missing Chinese banker was working to set up Singapore family office
Hong Kong ditches Covid mask mandate after 945 days
Xi Jinping and His Wife Meet with Cambodian King Norodom Sihamoni and Queen Mother Norodom Monineath Sihanouk
How do stolen goods end up on Amazon, eBay and Facebook Marketplace?
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Spain officials quit over trains that were too wide for tunnels...
Hello. Here is our news digest from London.
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
When it comes to Tesla vs Lamborghini, an empty vessel makes more noise
European MP Clare Daly condemns US attack on Nord Stream
Former U.S. President Carter will spend his remaining time at home and receive hospice care instead of medication
North Korea test-fires an intercontinental ballistic missile into the Sea of Japan west of Hokkaido
US bombed Nord Stream gas pipelines, claims investigative journalist Seymour Hersh