Macau’s VIP segment, once a driver of the city’s gaming industry, hit new lows in the third quarter of 2022.
Data released by the city’s Gaming Inspection and Coordination Bureau (DICJ) showed that gross gaming revenues (GGR) for the segment amounted to just MOP$1.16 billion (US$143.5 million), versus MOP$31.09 billion (US$3.85 billion) for the same period in 2019, prior to the Covid-19 pandemic.
According to Inside Asian Gaming, VIP spend comprised just 20.8 percent of all Macau GGR for the quarter, versus 44.7 percent in the fourth quarter of 2019.
In addition to the impact of Covid-19, the slide can be attributed to Beijing’s crackdown on corruption in the gaming industry, and the government’s dim view of junkets that arrange credit for high rollers—including highly placed public officials. As reported by Macau Business, prior to 2014, two-thirds of GGR in Macau was contributed by VIPs, and more than 95 percent of them were corporate and public officials based in Mainland China.
Citing the 2022 study “Examining the Impact of China’s Corruption Crackdown: A Forecast for Macau’s Tourism and Gaming Industry,” the publication reported that China’s anti-corruption policy “prevented high rollers in Mainland China from spending large amounts on gambling, and punished over 1.34 million corrupt officials from 2013 to 2017.”
Not surprisingly, that crackdown scared off a lot of high-spending gamblers, “which had a direct and seriously negative impact on Macau’s VIP gaming revenue.”
The study authors concluded, “As a result of this, it is expected that VIP baccarat will no longer be the main contributor to Macau’s gaming industry, and Macau will need to offer more diversified services to meet the demand of the ever-changing market.
“In fact, both the gaming industry and the Macau government are fully aware of this trend and have started to create a new image for Macau.”
They added, “Since no significant increase in demand from the mass market can be expected in the near future, it is critical for casinos to expand their customer bases. Casinos might need to consider lowering their minimum bets and providing new gaming options such as poker and bingo-style social games to attract more visitors, particularly casual gamblers and senior tourists.”
