Aaron Kwok’s 2024 tour in Macau. Image Source Visual China
Written by Wu Zha Edited by Wen Shijun From Prism Tencent Xiaoman Studio
Written by Wu Zha Edited by Wen Shijun
Published by Prism Tencent Xiaoman Studio
On Dec. 17, Ho appeared on a CCTV talk show, an interview with special significance during the 25th anniversary of Macau’s return to China.
Stanley Ho, the King of Gamblers, had 6 sons and 11 daughters in his lifetime, and Ho, born in 1995, is the youngest son. Compared to his older siblings, Ho is not the most successful, with fourth sister Pansy Ho, known as the Queen of Gambling in Macau, being the chairman of the board of MGM China, and second brother Lawrence Ho at the helm of Melco International.
Macau’s casinos are operated by six major gaming companies, of which MGM China and Melco International are two.
The difference with Lawrence Ho is that his career has nothing to do with gambling. On July 26 of this year, he founded the Star Athletics Mighty Group, a company centered on e-sports clubs, which went public on the Nasdaq.
Nowadays, Macau is committed to diversification, which is the same frequency as Mr. Ho’s career. A few days ago, then Macau Chief Executive He Icheng said in a media interview that the SAR government spared no effort to promote the development of non-gaming elements, and that Macau is no longer a gaming-dominated city, but is gradually displaying diversified development.
According to He Icheng, in 2023, Macau’s gaming revenue has recovered to about seventy-five percent of its 2019 level, accounting for 37 2 percent of GDP.
In 2019, before the epidemic, gaming accounted for 51 2 of Macau’s GDP and had peaked at 63. In just a few years, Macau has reversed the dominance of the gaming industry and is no longer a pure gambling city.
Once there were casinos as far as the eye could see
Who is the richest city in China? Undoubtedly, it’s Macau.
It’s a tiny city of 33 3 square kilometers, a circle smaller than Shanghai’s Pudong Airport, and it takes just over 20 minutes to drive from Gongbei Border Crossing to Taipa, the reclaimed new city.
But it is such a small city that has a GDP of 350 billion yuan a year, much higher than most prefecture-level cities in China. In 2023, for example, Macau’s GDP will be MOP379.5 billion, while Binzhou in Shandong province, which ranks 100th in China in terms of GDP, will be just 310 billion yuan. Meanwhile, Macau has only 700,000 people, less than 1 5 of Binzhou, and its area is even only 1 290 of Binzhou.
There are casinos as far as the eye can see. This is the impression that many people had of Macau in the past many years. Gaming was once the only industry in Macau that could be called a pillar.
Whether it was the landmark Lisboa, the Paris Tower, the Venetian, the Wynn Palace, or the Four Seasons, the City of Dreams, the Grand Canal Shoppes, where tourists used to go, as well as the Michelin restaurants and the free buses that parked at the border, the buses operated by the casinos, they all belonged to the casinos.
Looking back at history, gaming was legalized in Macau as early as 1847, and in May 1982, the Legislative Assembly of Macau passed the new Macau Gambling Law, which changed the term gambling and entertainment to lucky betting, which is considered to be the beginning of the official official references to gambling as betting.
Over the course of nearly two hundred years, Macau has given birth to four recognized kings of gambling, the first being Lo Kau, the second being Fu Lo Yung, who was active during the late Qing Dynasty and the Republican era, the third being Stanley Ho, and the fourth being Lui Che Woo, the founder of Galaxy Entertainment, who passed away in November of this year.
Stanley HO used to monopolize the gaming industry in Macao for 41 years, and after the reunification of Macao, the call for liberalization of the gambling rights became louder and louder. in August 2001, the Legislative Assembly of Macao passed the legal system for the operation of lucky betting in casinos, and the monopoly of the gambling rights started to break.
After the liberalization of gambling rights in 2002, Macau’s gaming industry developed rapidly. in 2006, Macau’s gross gaming revenue surpassed that of Las Vegas, and since then, it has been recognized as the largest casino city in the world. The economy of Macao has also achieved leapfrog development in the 25 years after the reunification, with its GDP in 2023 being seven times that of 1999.
However, the dominance of the gaming industry has made Macau controversial.
For example, the VIP lounges, which once occupied half of the gaming industry in Macao, are full of illegal acts such as money laundering, undercover betting, violence in debt collection, and so on. Stackers often organize mainland residents to go to Macao to gamble, and some problematic officials have also become regular customers of the VIP lounges.
This paper-drunk city has witnessed daily tragedies in which gamblers have lost their fortunes. In the vicinity of the MGM casino, there is a sidewalk known as the Paralyzed Boulevard by gamblers. Some gamblers who have lost all their money will curl up on the stone chairs here for the night, and then go to the casino for a handful of times when they have borrowed money.
Is it a brutal gambling city, or is it the world capital of tourism and leisure? In the minds of many Macanese, it’s not hard to answer.
No development of non-gaming, no authorization of gambling tables
For many basketball fans, next October will be an enjoyable experience.
On Dec. 6, the NBA and Sands China announced that starting in 2025, the NBA China Game will come to Macau Next year, on Oct. 10 and 12, the Brooklyn Nets and Phoenix Suns will play two preseason games at the Venetian Variety Pavilion. This will be the relaunch of the NBA China Game after a six-year hiatus.
Why are these two iconic games being held in Macau? This is because sports are an important part of Macau’s 1 4 strategy of moderate and diversified economic development.
The Macau SAR Government first proposed the 1 4 Strategy in the 2023 Policy Address. Among them, 1 is to promote the diversified development of tourism and leisure in accordance with the goal and requirements of building a world center of tourism and leisure 4 is to continuously promote the development of the four key industry sectors, including traditional Chinese medicine and major health, modern finance, high-tech, convention and exhibition commerce and trade, and culture and sports.
After the handover, diversified development has been a cause that successive Macao governments have endeavored to promote. As early as 2000, the Government of the Special Administrative Region (SAR) proposed in its Policy Address to make Macao an economically diversified, modernized and internationalized city.
In 2002, the liberalization of Macau’s gambling rights provided an opportunity for Macau’s diversified development. In that highly publicized battle for gambling licenses, Galaxy Macau Wynn was awarded three gambling licenses. One of the main reasons why two gambling licenses were awarded to Wynn and Galaxy was that the SAR government recognized their experience in non-gaming areas.
For example, Galaxy, whose founder, LUI Chi-woo, is known as the king of hotels, has joined hands with him in the Sands Group, whose consistent business style is to integrate gaming with convention and exhibition tourism. Wynn, on the other hand, has even more to offer. Its founder, Stephen Wynn, is known as the father of Las Vegas, and it was under his leadership that Las Vegas was transformed from a purely gambling city into a family-oriented tourist city.
In the years since, the Macau government has been guiding gaming companies to develop non-gaming business. But for the gaming companies, they have no incentive to quit gambling, for after all, betting is much more profitable.
According to Macau law, the number of gaming tables to be placed in a casino needs to be approved by the SAR government. in November 2012, the SAR government reinforced the importance of non-gaming business when it released the 2013 Policy Address, which stated that the number of gaming tables to be approved should take into account the non-gaming elements of the gaming companies.
By 2014, under the influence of external factors, after several consecutive years of rapid growth, Macau’s gaming industry’s experienced a slight decline, and in 2015, it plummeted, with gaming revenue in that year equivalent to only 65 7 of the previous year.
This made both the Macau government and gaming companies realize that over-reliance on the gaming industry is not a long-term solution. The SAR Government further proposed in the 2015 Policy Address that it would supervise and oversee the gaming companies to increase non-gaming elements, and at the same time require the gaming companies to submit information on their investment and development of non-gaming elements within the year.
This can be seen from the wording of the financial reports of the six major gaming companies in the past years. Prior to 2016, three gaming companies had included non-gaming business as part of their development strategy, and in 2016, another gaming company included non-gaming business in its development strategy.
Over the next 10 years: Investing over $100 billion in non-gaming operations
In 2022, the gambling licenses of the six major gaming companies will expire successively, and Macau has ushered in another competitive battle for gambling licenses. In this gambling license auction, non-gaming business has become the most important assessment factor for the government, including the amount of investment in non-gaming business Past experience of non-gaming projects Whether there are achievements, etc..
At that time, apart from the six major gaming companies, the Genting Group, which belongs to Malaysian gambling king Lim Kok Thay, was also attracted, which made the bidding confusing. In the end, the Genting Group was out of the race and the 6 major gaming companies were awarded the renewal of the contract with no surprises.
Notably, Pansy Ho’s MGM China emerged as the biggest winner, with their bid scoring the highest and the number of approved croupiers increasing by 35 9 to 750.
SJM’s bid scored the lowest, with a 29 2 decrease in the number of gaming tables, but still with 1,250. Melco International’s croupiers were down 17 8 to 750, Wynn Macau’s were down 10 7 to 570, while Sands China and Galaxy Entertainment were little changed.
At that time, the six major gaming companies promised to invest 118.8 billion patacas in 10 years, but only 10.1 billion patacas would be invested in gaming projects, while the remaining 108.7 billion patacas would be spent on non-gaming and expanding overseas sources of visitors, with investment focuses including entertainment performances sports events culture and arts health and wellness themed rides culinary capitals marine tourism, etc.
According to the information, Sands China Galaxy Entertainment Wynn Macau MGM China Melco International SJM will invest 27.8 billion, 27.5 billion, 16.5 billion, 15.0 billion, 10.0 billion and 12.0 billion in non-gaming projects respectively.
At that time, some analysts said that although the amount of investment in non-gaming business promised by MGM China was not dominant, they were able to become a dark horse thanks to their past investment in non-gaming business and future plans, as well as the strength of its parent company, MGM Resorts International MGM US, in the non-gaming industry.
Nowadays, the development of non-gaming business is no longer a helpless move by major casinos in response to the government’s call, but an important strategy to cope with market changes and differentiate themselves from the competition.
In November 2021, Macau was rocked by the Chow Cheuk Wa case, in which Chow Cheuk Wa founded Sun City, the largest VIP lounge operator in Macau, and was also known as the King of Gambling Lounges. At the time, Chow was arrested and imprisoned for suspected fraud, money laundering, illegal business operations and other charges.
A storm blew up in Macau to rectify the VIP lounges. Since then, the 6 major gambling companies no longer cooperate with the intermediary companies, the VIP halls completely disappeared, leaving only the company halls directly operated by the casinos.
The gaming companies have also focused their operations on the center court.
The midfield is generally located on the first floor of the casino The second floor, where gamblers gather, is the most lively place in the casino, although its profit margin is much higher than the VIP hall, but due to the fact that most of the gamblers are retail tourists, the betting turnover is low, and for a long period of time, it has not been given any attention by the gaming companies.
The mode of operation of the mid-point is also completely different from that of the VIP lounges. While the latter relies on the active solicitation of customers by stackers, the former relies on the natural flow of visitors. In order to attract tourists, especially quality tourists, bookmakers will need to create a series of exciting non-betting programs, such as concerts, races, exhibitions, and so on.
Taking Sands China as an example, it is currently the most profitable gaming company in Macau. In 2023, Sands China held more than 70 performance events, including 12 Jacky Cheung concerts and nine Eason Chan concerts, which attracted a total of 560,000 visitors.
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