Since Macau’s borders reopened in early January, gross gaming revenues (GGR) for the city’s casino industry have bounced back almost to pre-pandemic revenues. Should that trend continue and operators reap MOP$180 billion (US$22.3 billion) or more in GGR this year, they will be required by the local government to increase their non-gaming investments by 20 percent in 2024. The increase is stipulated in their 10-year concession agreements, which were signed in December and took effect January 1.
As reported by GGRAsia, the Big 6—Wynn Macau, Sands China, MGM China, Melco, SJM and Galaxy—have already allotted a total of US$13.47 billion for non-gaming and overseas marketing.
Pansy Ho, chairwoman and executive director of MGM China, says the U.S.-based company would focus its investment in “Big Health,” a broad term that includes health management, medical care, Chinese medicine and cosmetology and spa services.
Recently, a casino executive speaking on condition of anonymity said Macau gaming companies are being asked to grow industries that are beyond their areas of expertise. Though meetings and conventions, culture and sports might be good fits, the Macau government also wants concessionaires to support the growth of technology and financial services as well as health-related services.
Ho seems unfazed by the government’s new demands. Speaking at a recent event at MGM Cotai, she said the Asia subsidiary of MGM Resorts International would build out new MICE and art space at its two Macau resorts and also earmark 100,000 square feet in Cotai for additional non-gaming amenities.
“MGM will favor the ‘Big Health’ side, and we always do research in that area,” said Ho.
Asked if additional investments would undermine MGM’s finances, Ho replied, “We have been in contact with the syndicate of banks and generally speaking, it’s not a big problem. MGM is now in a profitable position and is well capitalized, so there’s no problem in making non-gaming investments.
“We have already explained to the government how we would invest during last year’s gaming license tender, and there is a format to explain investment matters,” she continued. “The six concessionaires now know how much money they have to invest in the non-gaming elements.”
She also said the company is fully capable of meeting the city’s goal to increase global tourism. “Our advantage lies in the relationship between us and MGM in the USA, as we have agents in different markets around the world, so we can develop our international customer base more quickly.
“Data from the first half of this year shows that the number of international guests is quite good.”
