Home News Macau’s Remarkable Revival as World’s Top Gambling Hub

Macau’s Remarkable Revival as World’s Top Gambling Hub

By Manny Wood.
Fact checked by Wilbur Thompson.

In an astonishing turn of events, Macau has reclaimed its status as the globe’s premier gambling haven, and it’s the casino industry that’s basking in the benefits of this resurgence. Macau, the sole destination in China permitting gambling, weathered a challenging period when both the city and mainland China implemented stringent quarantine measures, leading to a dramatic drop in tourism. This decline in visitors caused casino revenue to plummet, for the first time in years placing Macau behind its American counterpart, Las Vegas. Additionally, a stringent regulatory crackdown targeted the affluent Chinese high-rollers who had been the lifeblood of gaming enterprises.

However, the tide has shifted, with gamblers thronging to the recently reopened Macau, breathing new life into the gaming industry. The most recent evidence of this resurgence comes from Las Vegas Sands, the proprietor of Macau’s renowned resorts, including The Venetian and the Londoner.

Las Vegas Sands, headquartered in the United States, revealed a revenue of $2.8 billion for the most recent quarter, surpassing analyst expectations of $2.72 billion and more than doubling the $1.01 billion from the previous year. Following the release of the earnings report, the gaming company’s shares surged by over 5% in after-hours trading.

CEO Robert Goldstein expressed his delight at witnessing the recovery of travel in Macau and Singapore, where the company manages another casino. He also conveyed the company’s strong enthusiasm for future growth opportunities in both markets.

Several other Macau-based casinos are also experiencing a resurgence. MGM China, another prominent player in Macau, reported unaudited revenue of $1.2 billion for the first half of the year, twice the amount from the preceding year. Meanwhile, SJM Holdings, which operates the Grand Lisboa Palace Resort, recorded a remarkable 127% year-on-year surge in revenue for the initial six months of 2023.

Remarkably, despite its name, Las Vegas Sands garners the majority of its revenue from Asia. The company’s billionaire founder, Sheldon Adelson, shifted his focus to Asia with substantial investments in Macau and Singapore. In 2022, the company divested all of its properties on the Las Vegas Strip when it sold the Venetian Casino in Las Vegas to VICI Properties and Apollo Global Management.

Goldstein emphasized the significance of Asia, stating that it remains the core of the company’s operations.

Macau holds the exclusive distinction of being the sole region in China where casino gambling is legally permitted, owing to its unique legal framework. Prior to the COVID-19 pandemic, the gaming industry contributed over half of the city’s GDP and employed approximately 17% of its 600,000 residents. In 2019, Macau’s casinos generated roughly $36 billion in revenue, dwarfing Nevada, the home of Las Vegas, which reported just under $12 billion in gambling revenue during the same period.

Nonetheless, the pandemic’s complete disruption of travel severely impacted Macau. The city, like other areas in China, imposed stringent, weeks-long quarantines on incoming visitors, including those from the nearby city of Hong Kong. In 2020, the number of visitors to Macau plummeted to a mere 5.9 million, a stark drop from 39 million in the preceding year.

Beijing further intensified its crackdown on “junkets,” organized tours that were allegedly aiding high-rollers in circumventing capital controls and facilitating large-scale money transfers across the Macau border. Since November 2021, authorities have apprehended two prominent junket operators.

Recognizing the need to diversify its economy beyond gambling, Macau’s administration secretary, Cheong Weng Chon, urged gaming companies to invest in non-gaming ventures after the renewal of their casino licenses in the previous year. In line with this, Sands pledged to invest $3.8 billion in new facilities over the next decade, with over 90% allocated to non-casino attractions.

With the removal of COVID-19 restrictions, tourists are returning to indulge in the city’s gaming offerings. Quarantine-free travel across the land border with mainland China resumed in August 2022, and Macau eliminated all quarantine constraints in January. In August, gaming revenue in Macau surged past $2 billion, once again outpacing Nevada and Las Vegas, which reported $1.2 billion in revenue. Furthermore, China’s stringent crackdown has resulted in a different breed of visitor coming to Macau, with mass-market tourists flocking to the city for gaming, shopping, and entertainment.

Surprisingly, Sands’ exceptional quarter came despite a return of arrivals not yet reaching pre-pandemic levels. The company disclosed that arrivals from mainland China, excluding the neighboring province of Guangdong, had reached 72% of pre-pandemic levels.

Las Vegas Sands possesses five properties in Macau, with The Venetian Macao being its flagship moneymaker. Meanwhile, Singapore, home to Sands’ Marina Bay Sands resort, is also witnessing a resurgence in tourist numbers, with over 1.1 million international arrivals in September, marking a 44.5% increase compared to the same period the previous year.