In this interview with CalvinAyre.com’s Stephanie Raquel, Anthony Cabot of Lewis Roca Rothgerber Christie LLP how Macau can sustain its renewed growth.
In the last quarter of 2016, Macau’s gambling industry has shown signs of life as it posted positive gross gaming revenues (GGR) following 26 consecutive months of decline.
Analysts from different brokerage firms attributed the resurgence of Macau’s GGR to the opening of Wynn Palace and Sands China, which drew mass gaming players to the world’s premier gaming hub. The influx of mass players to the former Portuguese enclave has offset the dwindling number of high rollers.
Infrastructure, according to analysts, also fueled Macau’s casino revival.
But Macau’s gambling industry remains fragile despite the seeing growth in the past four consecutive months. First, Beijing keeps a close eye on the region amid its corruption crackdown. Lastly, Asia’s premier gaming hub faces tough competition from its neighbors.
In December, Japanese legislators passed a bill legalizing the establishment of casinos in the land of the rising sun. Casinos teeming in Southeast Asian countries have drawn VIP high rollers, who have been fleeing from the long arms of Chinese authorities.
Anthony Cabot of Lewis Roca Rothgerber Christie LLP pointed out that Macau needs to do more than just attracting mass-gaming players from the mainland in order to sustain its growth.
Cabot said that at present, a lot of Macau’s revenues are based on the policies imposed by Beijing with regard to corruption, with regard to banking systems.
“I think it is very good that you see this improvement. I never know how Beijing is going to change its policies. I think the challenge for Macau is to diversify so that it will not be so heavily reliant on mainland China for all their customers,” Cabot told CalvinAyre.com. “I think Macau is fortunate because it’s in a region, it has high demand for gambling. But that’s going to change. Overtime, the competition in the region is far greater. If Japan comes online, and there’s more casinos in Vietnam and Laos, and other places.”
He believes that the Macau government should look at the success story of Las Vegas – which has managed to claw its way back to profitability after years of slumping GGR – if it wants to keep the region afloat.
“I think Macau’s got to learn to be better at bringing in new customers. Las Vegas learned that, Atlantic City never did. That’s why Las Vegas is sustainable,” he said.