Macau Gambling Industry – 2018: Challenges and Opportunities

Macau’s gambling industry looks pretty promising this 2018. It has been struggling for the past 3 years but now, it is finally picking up again. In fact, there is a good chance that it will be as successful as it was before 2014 when its casinos were in full bloom. For the first time in 3 years, the revenues are going up. It will be an exciting year for operators and players alike, including tourists since Macau is one of the favorite places for casino players from all over the world. Whether they like to roll the dice at the roulette table, spin the slots machine’s wheel or play a thrilling poker tournament.  
 
So, what challenges and opportunities is the city’s gambling industry facing this year? Financial experts are projecting that the growth trends will continue for 15 straight months and this growth appears to be stable. These increases are not only the effects of casino players spending more time on the tables but because of the growing number of nongaming events that are expected to boost the numbers throughout the city. There is the Macau Grand Prix which is set to begin late January.
 
How It Bounced Back
Macau’s rebound from its decline happily coincides with the opening of 2 new resorts, the Wynn Palace and Sand’s Parisian. The two are greatly contributing in attracting recreational gamblers in Macau. These new casinos are driving gaming revenue growth. Furthermore, they are adding nongaming attractions and hotel rooms, attracting mass-market gamers to the city. Their occupancy rates have greatly improved.

Figure 1 Wynn Palace Macau drives growth to Macau’s gambling industry in 2018. Image source: www.wynnpalace.com/en
It’s better infrastructure is also driving more growth. There are now transport links connecting the Chinese mainland to Macau and it’s boosting visitors especially after the expansion of the Gongbei Border set for completion this year. Even more exciting, the Hong Kong Zhuhai Macau Bridge and Macau light rail are going to drive more gamers once completed in 2019.
 
Just last year, there had been an increase in travelers who played casino in Macau on November. It was a 9.4% increase compared to November 2015. This resulted in over 2.83 million more people traveling to the city including those from Mainland China. Macau also has large markets of visitors from Hong Kong and Taiwan. These players love trying their lucks on Omaha High and Texas Holdem and they get the chance to play poker in the growing casinos in the city.
 
What’s New for Casino Players in Macau in 2018?
There are lots of new experiences awaiting casino players planning to visit Macau this year. The introduction of the new electronic live-dealer gaming table rules will be an interesting one for those who like online poker, and Omaha high among others.
 
There will be no limits on the type of games that a player can choose when they play an electronic live-dealer game. All bets and settlement are done electronically using a computer. They will have access to online poker and maybe even some free poker. Electronic units have become quite popular among gamers. Their faster gaming speeds produce more yield-per-seat.

 
Figure 2 Macau’s electronic live dealer games. Image source: news.worldcasinodirectory.com/150-seat-stadium-style-electronic-table-games-approved-for-sands-bethlehem-12996
The above-mentioned casinos, The Parisian Macao and Wynn Palace both have gotten permission to operate 25 new-to-market live dealer gaming tables this 2018. More tables, more revenues and more fun for the visitors. New properties from MGM Resorts and SJM are also set to open in 2018.
 
Of course, the casinos that have been in the city for years also bring good revenue and are expected to do so from this year forward. Some of the most popular casino hotels looking forward to more visitors this 2018 include the Four Seasons Hotel Macau and Altira Macau. Four Seasons feature an oasis feel complete with outdoor pools, lagoon, and spa. Its casino is very popular to gamers who like playing Omaha High, and Texas Holdem aside from other casino classics like Blackjack, Roulette, and other table games. The Altira, on the other hand is quite modern and its casino if buzzing with excited players, winning big on their different favorite games. There is also the Studio City which is a casino with guestrooms and restaurants and of course, the iconic Venetian Macao. It headlines the city’s casino boulevard and is a one-stop shop housing a hotel, a shopping mall, a variety of restaurants, theatres, and the famous gondolas. It has a 24/7 casino filled with locals and tourists playing online poker, poker 888, Texas Holdem, and Omaha High among others.
 
What Challenges Await?
Despite its continuing growth, there are few challenges awaiting Macau’s gambling industry in 2018. For one, its market is limited by government regulations which puts a cap on the number of casinos as well as the total numbers of gaming tables. And even with the growth predictions, there is a possibility the Macau’s growth rate could cool down from its pace. The good news for MGM is it will likely grow no matter what happens.
 
Other challenges that Macau is facing include offshore online gambling sites, regional competitions, and a shortage on human resources along with increasing labor costs. With today’s technology, casino players can play online poker and free poker along with other popular casino games at home on various international online gaming sites, turning revenue away from the city. Some players find it more convenient to play on offshore online gambling sites than to visit local casino sites. The tighter transit visa policy doesn’t help, either. More and more online gaming sites are taking away a big part of gaming revenue from the city.
 
The shortage on human resources along with increasing labor costs is another challenge that Macau’s gambling industry is facing this year. The new resorts alone would require over 8,000 workers and the local labor force has not been growing during the past years. Macau is facing a serious question of whether or not there is enough labor force to the new casino operations.
 
Macau’s casino-junket model also has an inherent vulnerability. The industry heavily relies on VIP business. It’s dependent on VIP gambling promoters instead of casino operators. Unlike Las Vegas and Singapore’s model, Macau’s casinos rely on middlemen in order for them to recover debts. With the increasing number of middlemen in Macau, the operating risks are increased.
 
The internal competition between Macau’s casino operators could also drag down the margins. The market systems are driven by various social and economic forces. As the competition in VIP junkets get more intense, the commission rates increase and it could drag down the profit margins of casino operators.
 
Conclusion
Despite the looming challenges caused by government regulations, competitions and economic situations, Macau’s gambling industry still has a good chance of growing this 2018. It’s a challenging yet exciting start of the year for casino operators as the current infrastructure projects, new resorts, and increased tables are predicted to attract more tourists who couldn’t be more eager to play Texas Holdem, and Omaha High among other casino favorites in Macau’s growing gaming hubs. For these reasons, it’s really important for Macau to have a plan to face the challenges awaiting them in order not to impede the industry’s growth.
 
Macau’s gambling industry bounced back after 3 years of struggling and their revenues are going up. There is no stopping it from being an exciting year for operators and players alike, including tourists even though tighter visa transit policies have been in place. Macau is one of the favorite places of casino players from all over the world so casino players would still swarm to the city despite those challenges.
 

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