Macau is setting maximum limits on casino gaming offerings and minimum income requirements to help recover from the effects of the pandemic. [Image: Shutterstock.com]
new hypotheses
Macau has set a limit of 6,000 gaming tables and 12,000 gaming machines along with minimum income requirements for new casinos in the coming year, according to the local government.
It has not imposed such restrictions in the past, but is looking to increase its power over casinos
The gambling hub in southern China has not imposed such restrictions in the past, but it is looking to increase its power over casinos. The six licensed operators in the region – Sands China, Wynn Macau, Galaxy Entertainment, MGM China, SJM Holdings and Melco Resorts – are also on expired licenses and will have to reapply.
Macau-based casinos generated $36 billion in revenue in 2019 before the outbreak of the first wave of COVID-19. The area has been struggling to recover ever since, and now it will have a shorter leash.
Minimum and Maximum
Bidding for new licenses began in late July and will run through September 14. Even with travel restrictions imposed by the Chinese government and VIP services suffering, Macau is still in a position to make a strong recovery, according to Morgan Stanley experts.
The Macau government expects the new regulations to play a major role in shaping the future of domestic gambling.
The government said in Statement on its website.
Licensed gambling houses will have to remit an income of seven million patacas (US$865,969) for each gaming table assigned to them. Each gaming machine will cost 300,000 patacas ($37,113) in income.
The minimum income for tables and machines ensures that the government receives a good amount of tax funding. Operators will have to make up for any shortfall if they fail to meet the minimum requirements. The government hopes the rules will force companies to take advantage of their own amenities.
In 2012, the government set a cap on table games which resulted in a 3% growth in offerings in casinos.
Macau struggles to recover
Macau had 6,198 gaming tables and 11,758 machines in operation at the end of 2021. Notably, the number of tables was down from 6,739 in the pre-pandemic period of 2019.
Local casinos are also still not in a strong position in the local or global market. The sudden rise in positive COVID-19 cases led to another 12-day closure of all casinos, and although they have since reopened, they still do not have much sponsorship due to other limiting factors.
Macau casinos spend an estimated profit of $600 million per month
It remains to be seen whether or not the government’s plan to cultivate growth will succeed, but all parties involved will hope for the best. Other gambling centers, most notably Las Vegas, are already generating solid financial results, while Macau casinos are raking in profits estimated at $600 million per month. In addition, Macau gaming offerings are not expected to generate any profit for at least a few months, if not longer.
Macau’s 2022 revenue is down more than 53% from the same period last year. Furthermore, it only has 15.3% of pre-pandemic traffic.
