Macau’s gaming and tourism industries are at a crossroads. Chief Executive Sam Hou Fai has warned that the city cannot escape the pressures of growing regional competition. As new casino markets emerge in Asia, Macau must rethink its strategy to maintain its position as the world’s top gambling hub.
Macau’s Challenges in an Intensifying Market
Sam Hou Fai, who took office in December, didn’t mince words when he addressed Macau’s Economic Development Council. He made it clear that the region will feel the impact of shifting global economic trends and the expansion of gaming markets across Asia.
“In recent years, the rise of unilateralism and protectionism has posed significant challenges to the global economy,” Sam noted. “Macau cannot remain unscathed, especially as competition in tourism and gaming from neighbouring cities intensifies and looms.”
While he didn’t name specific competitors, the threats are clear. Singapore and the Philippines have thriving gaming industries, with plans to grow further. Japan is set to introduce a multibillion-dollar casino resort in 2030, led by MGM. Meanwhile, Thailand is pushing to legalize casinos, aiming to enter the market by 2029.
Moving Beyond Gaming Dependence
Macau’s reliance on gaming has been a long-standing concern. While Sam has previously criticized the industry’s negative impacts, he recognizes its crucial role in the economy. His focus, however, is on reducing Macau’s dependence on casinos and expanding into new sectors.
The government has identified four priority industries:
- Financial services
- Healthcare
- Technology
- Meetings and conventions
Tourism also remains a key pillar. Macau is looking beyond mainland China to attract high-spending visitors. In 2023, tourism chief Maria Helena de Senna Fernandes launched the “Experience Macao Limited Edition” roadshow, targeting European and Arab travelers.
Despite a post-pandemic recovery, with 34.9 million visitors in 2024, Macau still relies heavily on mainland Chinese tourists, who make up 70% of arrivals.
A Sluggish Start, But Optimism Remains
While Macau’s gross gaming revenue (GGR) increased by 23.9% year-on-year in 2024, reaching MOP226.78 billion ($28.3 billion), the numbers still fall short of pre-pandemic levels.
Recent months have been shaky. December saw a 2% drop in GGR compared to the previous year, followed by a 5.6% decline in January, even with the Lunar New Year boost. Analysts at Citigroup don’t expect a turnaround until the latter half of 2025.
However, there are signs of resilience. Macau’s gaming operators have resumed dividend payments after a three-year freeze. MGM China and Wynn Macau restarted payouts in 2024, following Galaxy in 2023. Morgan Stanley expects the remaining major casino operators—Melco, SJM, and Sands—to follow soon.
Premium-Mass Market Drives Hope
The high-roller VIP segment, once the backbone of Macau’s gaming industry, has weakened under China’s tighter regulations on junket operators. The shift now is toward the premium-mass market—wealthy, but not ultra-rich, gamblers.
Jenny Lao-Phillips, a business professor at the University of Saint Joseph, sees this as the key to future growth. “It may take some time to return to pre-2019 levels,” she said. “But with a new market and strategies targeting this group, the future remains optimistic.”
The Macau government is betting on a recovery, forecasting MOP240 billion in GGR for the year.
Can Macau Stay on Top?
The challenge for Macau is clear: adapt or lose ground. As Asia’s gaming landscape shifts, the city’s ability to diversify its economy and attract new tourists will determine whether it stays ahead or falls behind. With competition heating up, the next few years will be critical.
