Macau’s Gaming Inspection and Coordination Bureau (DICJ) recently told Inside Asian Gaming that it retains the power to alter the investment plans of the city’s Big 6 casino concessionaires based on what it deems to be the most pressing social and economic challenges.
The concessionaires’ plans must also align with the government’s five-year plan, which was introduced earlier this month.
Each of the concessionaires was required to invest in non-gaming amenities as a requirement of their 10-year concession terms, which began January 1. The Big 6—Galaxy, SJM, Melco, Wynn, Sands and MGM—all submitted their 2023 plans in March. At the time, Chief Executive Ho Iat Seng said the government would “make a judgment based on their investment plans and put them into the government’s ‘1+4’ multi-industry development plan.”
On August 4, the government released its own “Development Plan for the Appropriate Diversification of the Economy (2024 – 2028).”
The five-year plan calls on concessionaires to help develop international tourism visitor source markets and promote diversification of tourist sources; promote culinary tourism; advance Macau’s cultural and creative brands; promote the sustainable and healthy development of the gaming industry; support quality higher education; and revitalize historic areas, among other goals.
An unnamed industry representative told IAG that the government’s five-year plan had not yet been finalized when concessionaires submitted their proposals, and the government mandates are fluid, so changes may be in the offing.
“This new five-year plan shows that most of the government’s development plans for the next five years are related to gaming concessionaires, including those in the areas of high technology and major healthcare,” he noted.
In reply to inquiries from IAG, the DICJ said, “The grantee company has to submit to the [special administrative region] government every year the implementation plan of the next year’s investment plan, and before the SAR government approves the plan, the government can adjust the investment project content, investment amount and implementation time in accordance with the needs of the socioeconomic development in consultation with the concessionaires. As for the specific project implementation plans of the investment plans of the concessionaires this year, they have already been submitted.”
During Melco’s second-quarter earnings call, Melco Chairman and CEO Lawrence Ho said “a lot of negotiations” continue with local authorities.
“What we’re seeing now is that there is a lot of reporting on the operators’ part—monthly reporting, quarterly reporting—[and] a lot of negotiations and discussions” around those plans, with the potential for change in the government’s demands.
In related news, according to government data, total non-gaming spend by visitors to Macau rose 354.6 percent year-on-year to MOP17.48 billion (US$2.1 billion) in the second quarter. Visitor arrivals reached more than 6.69 million in the second quarter, up 321.7 percent.
The government wants to boost the total economic contribution of non-gaming industries to 60 percent of gross domestic product by 2028, with gaming responsible for 40 percent of GDP.
In 2019, gaming accounted for about 80 percent of government revenues and about half of GDP; the latter figure dropped to 25.8 percent in 2022, due to the ongoing impact of Covid-19.
Macau did not fully reopen its borders until January 8. The government anticipates that international tourism and overnight visitation will return to pre-pandemic levels by 2028.
