The US-China trade war is likely to cause a slow down among Macau casinos in 2020.
Melco Resorts’ CEO Anticipates a Slow Year in 2020
Lawrence Ho, Chief Executive at Melco Resorts, suspects that 2020 will be a “down year” for casino operators in Macau. He made the prediction over the weekend, during an interview with CNBC, citing the US-China trade war and the devaluation of the renminbi as reasons for the expected decline.
There has been an overall increase in visitors to Macau, thanks to the opening of the Zhuhai Bridge which links the city to Hong Kong. However, the individuals who are spending time in Macau are spending less than they had previously.
“With the US-China trade war, with the renminbi devaluation it’s certainly having an impact on visitation into Macau and more predominantly how much people spend,” he said.
There are several issues affecting gambling revenue in Macau, but the protests in Hong Kong have not actually had an impact. According to Mr. Ho, there has actually been an increase in the number of visitors from Hong Kong to Macau, especially on weekends.
History of Gambling in Macau
Gambling tournament is the biggest source of revenue for Macau. It is responsible for over 50% of the money coming into the destination. Currently, there are 38 casinos in Macau.
Until 2001, the Sociedade de Turismo e Diversões de Macau had a monopoly on all gambling activities. As soon as the monopoly ended, huge firms from around the world jumped into the market, including companies like Las Vegas Sands, MGM and Wynn.
These companies worked hard to create a luxurious gambling destination for visitors from around the world. In under a decade, international gambling operators developed a highly successful gaming market.
Today, Macau is considered the gambling capital of the world. The Gross Gaming Revenue (GGR) of Macau is $28.04 billion, over four times higher than Las Vegas – which has a GGR of $6.4 million. Even when the area is experiencing economic difficulties, the casino market continues to thrive.
So, although 2020 is not expected to be a great year for Macau, the city’s casinos will likely still see some success. Local operators continue to diversify their offerings, and are working on providing a wider range of entertainment options for visitors to enjoy. As a result, visitors from Macau may be able to experience more shows and activities while in the city.