04 Introduction ICE365 Macau report
INTRODUCTION
THE SPECIAL ADMINISTRATIVE REGION ( SAR ) of Macau covers around 32.9 square kilometres of land , and is home to approximately 680,000 inhabitants . Gambling has been permitted in the territory since 1849 , while it was under Portuguese rule , but it only began to emerge as a key gambling destination from 1962 onwards , once Stanley Ho ’ s Sociedade de Turismo e Diversões de Macau ( STDM ) was granted a monopoly .
This heralded an influx of traffic from Hong Kong , among other places . But it was not until 2002 , when SDTM ’ s monopoly ended and the likes of Las Vegas Sands , Wynn Resorts and MGM Resorts International moved in , that Macau began to surpass Las Vegas as the world ’ s leading gambling destination .
It was 2007 when Macau ’ s gaming revenue first surpassed that of Nevada , and the gulf between the two locations has grown ever since . By 2019 , Macau ’ s revenue stood at MOP292.46bn (£ 25.82bn /€ 30.08bn /$ 36.60bn ). In the same year , Nevada reported gaming revenue of $ 12.03bn .
The two locations are very different . In Nevada , gambling is complemented by a host of other amenities and entertainment options , to the point that gaming is only one of a number of revenue streams . Research by the University of Nevada Las Vegas suggested that gaming made up 34.4 % of Las Vegas Strip revenue in 2019 .
Macau , on the other hand , is dominated by gaming . The industry accounted for 50.9 % of Macau ’ s gross domestic profit in 2019 and within that , non-gaming revenue totalled MOP33.74bn , or 10.4 % of total industry revenue .
So when its casinos were forced to shut , and travel from the Chinese mainland was restricted until September last year , it had a huge impact . Revenue fell 79.3 % to MOP60.44bn ($ 7.56bn ) in 2020 as a result , meaning that Nevada , with full-year gaming revenue of $ 7.87bn , actually surpassed Macau .
Unlike Nevada , which posted its first monthly total of more than $ 1bn in April this year , Macau ’ s recovery from the pandemic has been slower . Yet confidence in the SAR ’ s longterm prospects does appear to be significantly higher . Its licensees have a solid financial footing , properties are not having to rapidly hire new staff , and it has a huge Chinese market just a short ferry ride or plane journey away .
That being said , its dependence on gaming remains a potential problem . Last April the SAR ’ s chief executive Ho Iat Seng warned that the shutdown caused by Covid-19 highlighted Macau ’ s over-dependence on gambling .
“ With the outbreak of the novel coronavirus , the gaming and tourism industries registered significant declines , with profound impact on industries connected to these areas ,” Ho said . “ This demonstrates , once again , the vulnerability and the enormous risks of the Macau economy ’ s
ICE365 Macau report