Macau will still be heavily reliant on gambling in a decade

TAGs: Macau, Macau Cotai Strip, MGM China

It’s been estimated that gambling will still account for almost all sales in Macau in a decade’s time. MGM China, one of the largest operators on the enclave, estimates that the group’s gambling sales, that currently accounts for 95% of the group’s business on the enclave, will drop by a mere 10% to 85% in 10 years time. This compares to MGM Resorts International taking almost half of its revenues from non-gaming business in Vegas. MGM China CEO Grant Bowie explained that it took them “25 to 30 year to achieve that scale,” and would be happy to “do 15%” in Macau in the future.

MGM China relies gambling on MacauKey to their diversification plans will be the planned development on Macau’s Cotai Strip where a number of hotel rooms and store space will be available. Hong Kong-based gambling and consumer analyst at CLSA Asia Pacific Markets, Huei Suen Ng, recognizes that Macau needs to offer more and commented, “People do not go to Macau for non-gaming activities. It needs more facilities in terms of hotel rooms and infrastructure, including a connection to China’s high-speed rail network and a bridge to Hong Kong.”

In terms of the aforementioned Cotai development, Bowie added, “We all know it’s an issue now and the government is progressively working through a structured approach. We are comfortable we are going to have the labor, but I’m not saying we aren’t going to have hiccups.”

The Vegas of the east does continue to go from strength and right now can easily lean on the gaming industry’s predicted 40% annual growth. Vegas will attest to the bubble not lasting forever though.



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