Macau has been shifting away from what is discovered to be an overreliance on its gaming industry. The realization was reinforced during the pandemic with casino properties and parlors remaining idle and officials rolling up their sleeves to tidy up the industry from its often unhealthy relationship with junket operators.
IMF Sees Macau as Too Reliant on Gaming
Now, the International Monetary Fund executive board has begun discussions with the special administrative region (SAR), offering stern advice. To sustain future pandemics and overcome the economic doldrums, Macau will have to say its long slow goodbye to gaming. During the pandemic, the gross domestic product fell by 54% in 2020, with a small 18% growth in 2021.
Both events were linked to the gaming sector with casinos beckoning people from across the world to come and visit it. When the dust of this pandemic finally settles, however, things will be very different. For one, Macau has slashed the number of junket operators, raised the stakes for casino concessionaires that wish to proceed and have a relationship with such entities, and generally signaled its readiness to explore options beyond gaming to sustain its economy.
All of these developments are good signs, as a recent growth of GDP of 15.5% so far in 2022 indicates that gaming still plays a part. This is understandable as much of the economy revolves around those gaming venues.
Growth in Gaming to Be Slower Now Because of Regulation
For example, a 23% growth is expected to follow in 2023, once again driven by those same gaming properties. Weak services exports have made the administrative region particularly susceptible to disruptive events on a global scale.
“A resurgence of the Covid‑19 pandemic could stall Macao SAR’s near‑term recovery and undermine the medium‑term viability of the gaming sector.”
The IMF also took a closer look at Macau’s new raft of proposed gambling laws, and offered no advice on its viability, but argued that the stricter measures passed, along with the still struggling gaming sector, would mean that Macau cannot expect a swift recovery under the new regulatory mandates.