{"id":250940,"date":"2023-01-03T08:24:24","date_gmt":"2023-01-03T14:24:24","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=250940"},"modified":"2023-01-03T13:45:27","modified_gmt":"2023-01-03T19:45:27","slug":"macau-casino-operators-dealt-problematic-hand-nongaming","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/","title":{"rendered":"Macau Casinos Dealt Problematic Hand with Nongaming Obligations: Analyst"},"content":{"rendered":"<p class=\"p1\">The 10-year gaming concessions that the six Macau casino operators agreed to in November came with conditions that could render the market less attractive. That&#8217;s according to Ben Lee, a leading gaming analyst who&#8217;s focused on Asia markets.<\/p>\n<figure id=\"attachment_250945\" aria-describedby=\"caption-attachment-250945\" data-style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-250945\" src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg\" alt=\"Macau casino nongaming China Asia\" width=\"1200\" height=\"722\" srcset=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg 1200w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3-858x516.jpg 858w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3-430x259.jpg 430w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption  id=\"caption-attachment-250945\"class=\"text-description\">Downtown Macau. Macau casino operators will have a difficult time making a return on the $13.5 billion in nongaming investments that the local government ordered its six casino operators to make over the next 10 years. (Image: AFP)<\/figcaption><\/figure>\n<p class=\"p1\">Macau and its six casino licensees &#8212; Sands, Galaxy, Melco, SJM, Wynn, and MGM &#8212; agreed to further invest a total of $15 billion over the life of their concession terms. The new permits run through Dec. 31, 2033.<\/p>\n<div class=\"callout\">\n<p class=\"p1\">Of the $15 billion in capital improvements, 90% of the spending must go toward nongaming initiatives. The mandate comes from Beijing, which has instructed Macau to diversify its economy away from gaming.<\/p>\n<\/div>\n<p class=\"p1\">Macau&#8217;s reliance on casino tax revenue was made apparent over the past three years, as COVID-19 rendered the enclave lifeless of meaningful visitor traffic. That resulted in gross gaming revenue (GGR) tumbling from $36.4 billion in 2019 to $7.5 billion in 2020, $10.8 billion in 2021, and <a href=\"https:\/\/www.casino.org\/news\/macau-casinos-win-5b-in-2022\/\">just $5.25 billion last year<\/a>.<\/p>\n<h2 class=\"p1\"><b>Nongaming Unattractive<\/b><\/h2>\n<p class=\"p1\">Lee, the founder of Macau-based gaming consultancy IGamiX, believes the $13.5 billion in nongaming investments ordered deals the six gaming giants a difficult hand. Nongaming accounted for around just 5% of the casinos&#8217; pre-COVID business revenue.<\/p>\n<p class=\"p1\">Lee said previous attempts to diversify Macau&#8217;s casino industry weren&#8217;t successful. He explained that nongaming in Asia is quite different &#8212; and far less profitable &#8212; than in Las Vegas and other major casino markets where nongaming initiatives have been emphasized.<\/p>\n<blockquote class=\"main-blockquote\">\n<p class=\"p1\"><strong>For the past 20 years, none of the operators have managed to establish any significant progress in nongaming,&#8221;<\/strong> Lee told <i>Reuters<\/i>. <strong>&#8220;Contrary to the vaunted Las Vegas model, nongaming in Asia does not carry the same profit margin, as spending behavior is quite different over here.&#8221;<\/strong><\/p>\n<\/blockquote>\n<p class=\"p1\">Lee opined that Galaxy, Melco, and <a href=\"https:\/\/www.casino.org\/news\/las-vegas-sands-is-on-the-mend-according-to-fitch-ratings\/\">Sands are likely best-<\/a>suited to embark on the nongaming investments and find a way to make such resort amenities profitable. But Lee added that Macau doesn&#8217;t have the global recognition of being a leisure travel destination like Las Vegas or other integrated casino resort markets, such as Singapore.<\/p>\n<h2 class=\"p1\"><b>Infrastructure Concerns<\/b><\/h2>\n<p class=\"p1\">Adding to Lee&#8217;s worry about the $13.5 billion in nongaming investments is that he doesn&#8217;t think Macau is equipped to handle a large influx of business and\/or non-casino guests. Lee explained that&#8217;s because of Macau&#8217;s dilapidated infrastructure and shortage of skilled labor.<\/p>\n<div class=\"callout\">\n<p class=\"p1\">Macau is also relatively isolated from much of the world it seeks to attract, as Macau International Airport offers limited direct flights to potential feeder markets outside of mainland China.<\/p>\n<\/div>\n<p class=\"p1\">&#8220;There is no indication that I have seen that the government is, or intends to address, these weaknesses. Given the serial mismanagement of public works \u2026 it leaves concessionaires with a less than optimal host attraction proposition,&#8221; Lee stated.<\/p>\n<p class=\"p1\">Macau has been a popular destination for mainlanders, primarily for the one thing that isn&#8217;t legally allowed within China: gambling. The region liberalized commercial gambling in 2002, two years after the territory was handed back to China from Portugal.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 10-year gaming concessions that the six Macau casino operators agreed to in November came with conditions that could render the market less attractive. That&#8217;s according to Ben Lee, a leading gaming analyst who&#8217;s focused on Asia markets. Macau and its six casino licensees &#8212; Sands, Galaxy, Melco, SJM, Wynn, and MGM &#8212; agreed to [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":250945,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62],"tags":[82061,51],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Analyst: Macau Casino Operators Dealt Problematic Hand<\/title>\n<meta name=\"description\" content=\"The gaming concessions that the Macau casino operators agreed to came with conditions that could render the market less attractive.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analyst: Macau Casino Operators Dealt Problematic Hand\" \/>\n<meta property=\"og:description\" content=\"The gaming concessions that the Macau casino operators agreed to came with conditions that could render the market less attractive.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-03T14:24:24+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-03T19:45:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"722\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Devin O&#039;Connor\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@CasinoorgDevinO\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Devin O&#039;Connor\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/\",\"url\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/\",\"name\":\"Analyst: Macau Casino Operators Dealt Problematic Hand\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg\",\"datePublished\":\"2023-01-03T14:24:24+00:00\",\"dateModified\":\"2023-01-03T19:45:27+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/02b4fee8814a4003903b0021bffb4ebf\"},\"description\":\"The gaming concessions that the Macau casino operators agreed to came with conditions that could render the market less attractive.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-operators-dealt-problematic-hand-nongaming\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/6143563c89e9c765ac7237fb_o_U_v3.jpg\",\"width\":1200,\"height\":722,\"caption\":\"Downtown Macau. Macau casino operators will have a difficult time making a return on the $13.5 billion in nongaming investments that the local government ordered its six casino operators to make over the next 10 years. 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Devin's passion for politics and background in the world of pop culture television gives him insight into the gaming industry backstories that often drive news these days. After graduating from Penn State University with a theater arts degree, he worked at MTV Networks\/Viacom from 2005 to 2010 as a writer and producer. His credits included Total Request Live, New Year's Eve specials, and a special featuring poker superstar Daniel Negreanu. He later moved on to the HGTV\/DIY Network, where he created, wrote, and produced three series specials: That's So House Hunters, That's So 80s, and That's So 90s. Devin came on board with Casino.org in 2014. He lives in Pennsylvania and is an avid marathoner, having completed 15 races. 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Macau casino operators will have a difficult time making a return on the $13.5 billion in nongaming investments that the local government ordered its six casino operators to make over the next 10 years. 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Devin's passion for politics and background in the world of pop culture television gives him insight into the gaming industry backstories that often drive news these days. After graduating from Penn State University with a theater arts degree, he worked at MTV Networks\/Viacom from 2005 to 2010 as a writer and producer. His credits included Total Request Live, New Year's Eve specials, and a special featuring poker superstar Daniel Negreanu. He later moved on to the HGTV\/DIY Network, where he created, wrote, and produced three series specials: That's So House Hunters, That's So 80s, and That's So 90s. Devin came on board with Casino.org in 2014. He lives in Pennsylvania and is an avid marathoner, having completed 15 races. 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