Macau Casino’s Opting To Diversify To Compensate For Declining Revenues
The world’s largest gambling hub Macau has recorded record declines in gaming revenues in the last 12 months. The ongoing crackdown on corruption by the Chinese Government in what used to be the playground for Chinese VIP’s and officials has now got gaming companies realizing that they will have to emulate Las Vegas in that they will need to diversify away from gambling and into entertainment.
Currently over two thirds of revenues in Las Vegas are from non-gaming sources. Vegas has become a tourist and entertainment destination and is no longer solely associated with gambling. This model is what the likes of Macau’s gaming giants are looking to follow whether by choice or realization that the current corruption crackdown is not easing up.
Melco Entertainment Ltd. and Galaxy Entertainment Group are set to open up resorts on Wednesday 27 set to be worth over $3.2 billion. President of Melco’s Studio City resort project JD Clayton commented on the new resort launch,” We have really focused our attention on things beyond gaming to reach out for a new group of people and tap into new revenue streams.”
The Macau Government is taking active measures to force casino firms to follows the Vegas resort style model and are going so be giving incentives to gaming companies like Wynn Macau and Sands China gaming tables based on non-gaming amenities.
Gaming revenues still account for 90 percent of overall revenues in Macau so the process of adopting the Las Vegas model is complicated and a far way off. In what was initially seen as a publicity stunt by the Chinese government to crackdown on public corruption, has now turned into a major long term focus shift by the authorities to diversify Macau’s long term economy away from gambling and into a resort and tourist destination.