Angela Han Lee, Bloomberg APAC Gaming and Hospitality Analyst, provided an update on the Bloomberg Intelligence division’s insight into Macau, as well as how current politics are affecting the Chinese gambling hub.
Han Lee’s summary of ‘political risk’ at G2E Asia on behalf of Bloomberg comes amid the region’s recent Covid-19 lockdown imposed by Beijing and its zero-Covid policy. This is a major reason for the province’s struggles in 2022, with many difficult Q2 results recently published as a result.
Han Lee, on the other hand, mentioned other significant factors affecting the province.
One is China’s ‘common prosperity’ policy, instituted by Xi Jinping’s government to address the wealth disparity that is harming Macau’s gaming corporations.
The issue with the policy for Macau is that several people in China saw huge returns on investment after the recent internet boom and are now keeping their wealth offshore, resulting in a decrease in VIP business volumes that Macau previously relied on. This is something the region has seen since before the pandemic, and its resort casinos are now shifting to mass gaming for revenue – as the VIP base flocks to Singapore and the Philippines to gamble.
In her presentation, Han Lee stated directly, “Macau’s casinos are attempting to shift focus to the mass gaming segment, which has a higher margin.”
Meanwhile, another issue is the tax imposed on casual and VIP gamers. Macau has the highest tax rate in Asia, at 40%, compared to places like Singapore and Phnom Penh, which offer lower taxation in general for mass gamers and significant tax breaks for VIPs.
Overall, Bloomberg painted a bleak picture for Macau, but noted that the province’s returning and growing mass gamer base will provide significant relief in the near future.